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CLAIMS    AGAINST    MEXICO 


A  BRIEF  STUDY  OF  THE  INTERNATIONAL  LAW 
APPLICABLE  TO  CLAIMS  OF  CITIZENS  OF  THE 
UNITED  STATES  AND  OTHER  COUNTRIES  FOR 
LOSSES  SUSTAINED  IN  MEXICO  DURING  THE 
REVOLUTIONS  OF  THE  LAST  DECADE. 


BY 

RAOUL  E.  DESVERNINE 
of  the  New  York  Bar 

With  a  Foreword 

BY 

LiNDLEY  M.  Garrison 


Private  Edition 
192 1 


an-r 


Copyright  1921 

by 

RAOUL  E.  DESVERNINE 


CO 

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DC 
QO 


d 
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To 

My  Respected  Uncle, 

DR.  PABLO  DESVERNINE, 

One-time  Minister  to  the  United  States  and  recently 
Secretary  of  State  of  the  RepubHc  of  Cuba. 


TABLE  OF  CONTENTS. 


PAGE 

Foreword   i 

Preface 3 

Chapter  I. — ^Responsibility 7 

A. — Tn  General.  The  Modern  Trend  Toward  Responsi- 
bility         7 

B. — The  Attempt  of  Latin-American  States  to  Avoid  Re- 
sponsibility by  Municipal  or  Constitutional  Rej^u- 
lation 17 

C. — De  Jure,  de  Facto  and  Local  de  Facto  Governments. 
Brief  Review  of  Mexican  History,  Beginning  with 
the  Overthrow  of  Diaz.  A  Discussion  of  the  Nature 
of  the  Succc'-sive  Governments  and  Revolutionary 
Bodies  and  of  rhe  Liability  of  the  Present  Govern- 
ment for  the  Acts  of  Each 20 

Chapter  IL — Diplomatic  Interposition 27 

A. — Denial  of  Justice  as  a  Ground  for  Diplorna'.ic  Inter- 
position       27 

B. — Conditions  Prerequisite  to  Diplomatic  Interposition 28 

1.  Nature  of  the  Claim  and  Status  of  the  Claimant 

as  Affecting  the  Right  .to  Interposition 28 

2.  When  Local  Remedies  Must  First  be  Exh^austed     30 

Chapter  TIL— The  Presentation  and  Adjudication  of 

International  Claims 2>7 

Chap-t'er  IV. — 'Particular  Classes  of  Claims.  The  Rules 
OF  International  Law  x\ppli cable  to 
Each    _ 49 

A.— Land,    Petroleum    and    Mineral    Claims.     Effect    of 

Article  2^  of  the  Mexican  Coni-ititution  of  1917 49 

B. — Contract  Claims 70 

I.     Ccmract-.    i:Iel.ween    Individuals 70 


11  TABLE  OF    CONTENTS. 

PAGE 

2.  Contracts  with  the  Mexican  Government. — Con- 

cessions   _ _ 70 

3.  Bonds  of  the   Mexican  Government  or  Bonds 

Guaranteed  by  It _ _ 73 

C. — Acts  of  Authorities 76 

D. — Sanitary    Measures 81 

E . — Acts  o f  S o  1  di er s _ „ „ _ 82 

F. — Arrest  or  Imprisonment 84 

G. — Claims  Based  on  Revolutions  and  Insurrections 86 

1.  In  General _ „ 86 

2.  Martial  Law  _ 92 

3.  Compensation  for  Property  Taken  or  Destroyed 

for  Belligerent  Purposes 93 

4.  Claims  Resulting  from  Seizures  of  the  Revolu- 

tionist's Resources „ 97 

5.  Revolutionary  Finance.     Forced  Loans,  Mone- 

tary Decrees,  Bank  Liquidations  and  Revolu- 
tionary Finance  in  General 97 

6.  Damages  from  Wanton  and  Unlawful  Acts 104 

7.  Railroad  Claims  „ 106 

8.  Federal  Liability  for  the  Acts  of  Insurgents  and 

Revolutionaries  108 

H. — Acts  of  Private  Persons „ 114 

1.  In  General  _ _ _ 114 

2.  Acts  of  Individuals  117 

3.  Mob  Violence _ _ _ 119 

4.  B rigandage  - 121 

Chapter  V. — Obstacles  and  Defenses  to  Presentation  of 

Claims  _ 128 

A. — Expatriation    129 

B. — Renunciation  130 

1.  Contractual  Renunciation 130 

2.  Implied  Renunciation  130 

C. — Censurable  Conduct  131 

1.  In  General 131 

2.  Concealment  and  Denial  of  Citizenship 131 


TABLE   OF    CONTENTS.  Ill 

PAGE 

3.  Fraudulent  or  Exorbitant   Claims 132 

4.  Malice  and  Negligence  133 

5.  Evasion   of   National   Duties,   and    Particularly 

Military  Service  134 

6.  Breach  of  the  Local  Law „ _ 134 

7.  Breach  of  International  Law 135 

8.  Breach  of  National  Law 135 

9.  Trading  with  the  Enemy  or  Prohibited  and  Un- 

lawful Trading  1 35 

10.  The  Effect  of  Declarations  of  President  Taft 

and  President  Wilson  on  the  Liability  of  the 

Mexican  Government 136 

11.  Unneutral  Conduct  or  Unfriendly  Acts 140 

(a)  Unlawful  Expeditions  _ 140 

(b)  Unneutral    Military   or   Other   Acts    of 

Service  to  Foreign  Countries  or  Bel- 
ligerents    1 40 

(c)  Acts  in  "Aid  and  Comfort" 142 

12.  Acts  Against  Public  Policy „  143 

Chapter  VL — The  Measure  of  Damages _ __.  144 


Conclusion 


147 


FOREWORD. 

Whatever  views  may  be  entertained  as  to  the  advisability 
of  the  United  States  entering  into  what  have  been  termed 
"entangling  alliances"  with  other  nations,  the  desirability  of 
closer  commercial  relations  between  all  nations  and  between 
the  nationals  of  the  nations  can  hardly  be  doubted.  We,  in 
the  United  States,  have  shown  a  national  reluctance  toward 
learning  International  Law,  but  closer  commercial  relations 
will  inevitably  require  from  us  a  greater  knowledge  of  this 
subject  than  has  heretofore  been  necessary.  Among  other 
things  we  must  become  familiar  with  the  rules  which  obtain 
where  nationals  of  one  government  have  claims  against 
another.  To  this  end  the  careful  study  and  the  concise  state- 
ment, of  certain  principles  of  international  law  made  by  the 
author  of  this  work  will  be  found  to  be  of  great  use.  While 
this  work  by  its  title,  specifically  covers  only  claims  against 
one  particular  government,  that  of  Mexico,  the  underlying 
principles  discussed  are  universal  in  their  application.  It  is 
much  to  be  regretted  that  the  inclination  of  our  citizens  to 
confine  themselves  too  much  to  their  own  interests  and  to 
those  of  their  country  has  led  them  to  neglect  the  acquisi- 
tion of  knowledge  concerning  other  countries  and  of  those 
broad  principles  of  law  which  underlie  international  dealings. 
The  size  of  our  country  and  its  rapid  development  have 
tended  to  make  us  too  self-centered.  The  self-interest,  how- 
ever, involved  in  acquiring  and  creating  foreign  trade  is 
rapidly  causing  a  change,  and  treatises  such  as  this  one  are 
of  great  value  in  helping  this  change  to  come  about.  This 
volume,  in  addition  to  its  general  value,  has,  it  seems  to  me, 
a  great  and  unique  usefulness  in  the  specific  field  it  assumes 
to  cover.  Mexico  seems  to  be  attaining  her  equilil)rium  at 
last  and  it  is  hoped  that  she  will  soon  resume  her  normal  posi- 
tion in  the  family  of  nations.  It  will  be  necessary  for  Mexico 
in  order  to  regain  her  normal  position  in  the  world  to  meet 
fully   all  her  obligations,   more   especially   those   toward   any 


who  have  legitimate  claims  against  her.  This  book  presents 
the  fundamental  rules  and  considerations  which  govern  the 
subject  of  claims,  and  points  out  the  proper  course  to  be 
pursued  in  the  presentation  and  prosecution  of  such  claims 
with  the  hope  that  an  orderly  procedure  will  ensue  and  that 
the  claims  will  be  adjudicated  fairly  and  equitably.  The 
arrangement  seems  to  me  to  be  excellent,  and  the  treatment 
of  the  subject-matter  as  comprehensive  as  possible  in  a 
volume  of  such  small  compass,  and  its  usefulness  unlimited 
within  its  field.  I  feel  a  certain  degree  of  pride  that  one  of 
my  partners  has  made  this  unique  and  valuable  contribution 
to  an  important  subject. 


LINDLEY  M.   GARRISON. 


New  York  City, 
May  20,  192 1. 


PREFACE. 

The  misunderstanding  between  Mexico  and  other  nations 
in  the  matter  of  claims  for  losses  sustained  during  the  Mex- 
ican revolutions  since  1910  has  been  intensified  by  the  failure 
of  many  statesmen,  politicians  and  publicists,  particularly  in 
Mexico  and  the  United  States,  to  reach  conclusions  in  accord- 
ance with  well-settled  principles  of  international  law  and 
sound  diplomatic  practice.  When  occasion  has  arisen  for  a 
determination  of  policy,  tragedy  has  several  times  threatened 
because  eloquence  displaced  clear  thinking  and  judicial 
deliberation. 

Many  estimates  of  the  damages  sustained  by  aliens  in 
Mexico  have  been  made,  but  these  estimates  at  best  are  but 
guesses.  Strange  though  it  may  seem,  there  has  heretofore 
been  no  attempt  to  collect  the  principles  of  international  law 
applicable  particularly  to  the  Mexican  situation,  and  to  view 
the  issue  of  responsibility  and  liability,  and  to  meastire  the 
recoverable  quantum  of  damage,  with  such  a  codification  as 
a  foundation. 

In  the  preparation  of  this  volume  there  has  been  little 
occasion  for  originality.  Practically  the  entire  subject  is 
governed  and  controlled  by  diplomatic  precedents  readily 
available  to  the  student  and  discussed  in  the  works  of  author- 
ities. This  treatise  is  not,  therefore,  a  composition,  but  a 
compilation.  Selection  has  been  made,  wherever  possible,  of 
international  precedents  covering  controversies  to  which 
Mexico  has  been  a  party,  and  because  of  the  peculiar  position 
of  the  United  States  imder  the  Monroe  Doctrine,  particularly 
of  precedents  between  the  United  States  and  Mexico ;  further- 
more, it  has  not  been  possible  within  a  volume  of  this  size  to 
exhaust  the  subject  or  even  to  indicate  the  law  applicable 
to  every  possible  type  of  claim.  The  intention  has  been  to 
include  only  the  major  classes  of  claims. 

Whenever  possible,  only  well-settled  principles  of  inter- 
national law  have  been  stated.     When,  on  any  question,  there 


has  been  room  for  a  fair  diversity  of  opinion,  an  effort  has 
been  made  to  express  both  sides  with  equal  force  unless  a 
conclusion  seemed  necessary  by  a  distinct  overbalancing  of 
the  logic  of  one  view  or  of  the  precedents  supporting  it. 

It  is  universally  recognized  that  Mexico  cannot  come  to 
tlie  fullest  development  of  her  wonderful  resources  and  to  her 
highest  evolution  as  a  State,  except  through  the  aid  of  foreign 
capital  and  enterprise.  This  aid  will  surely  be  available  only 
upon  a  renewal  of  normal  relations  with  the  rest  of  the  world. 
Only  when  other  nations  are  satisfied  that  their  citizens, 
holding  claims  against  Mexico,  are  in  a  fair  way  to  be 
accorded  justice,  wnll  the  resumption  of  normal  relations  and 
the  consequent  development  of  Mexico  begin.  It  is  believed 
that  even  so  moderate  an  effort  as  the  present  one,  to  codify 
or  indicate  the  principles  of  international  law  applicable  to 
the  claims  situation,  will  help  materially  to  hasten  the  day 
when  Mexico  Vv'ill  come  to  an  understanding  with  her  sister 
nations  and  agree  upon  a  basis  for  an  adjudication  of  the 
claims. 

It  is  with  a  sincere  belief  in  the  possibilities  of  Mexican 
development,  a  development  unquestionably  dependent  upon 
a  resumption  of  normal  relations  with  her  sister  states,  that 
this  volume  is  offered. 

This  book  was  rendered  possible  by  the  collaboration  of 
Mr.  Rene  A.  Wormser,  with  whom  I  share  credit  for  any  merit 
which  it  may  deserve. 

RAOUL   E.   DESVERNINE. 

24  Broad  Street,  New  York   City. 
May  i8th,  1921. 


CLAIMS   AGAINST   MEXICO. 


CHAPTER  I. 

RESPONSIBILITY. 

A. 

IN    GENERAL.     THE    MODERN    TREND    TOWARD 
RESPONSIBILITY. 

The  natural  evolution  of  international  law  has  been  accom- 
panied by  a  gradual  extension  of  the  protection  accorded  citi- 
zens abroad  and  a  corresponding  extension  of  the  principle  that 
the  State  is  responsible  for  the  maltreatment  of  aliens  within 
its  borders.  Before  the  beginnings  of  closer  international  rela- 
tions, the  State  was  law  unto  itself  and  aliens  within  its  confines 
were  in  a  position  inferior  to  nationals,  being  at  first  even  treated 
as  outlaws.^  Gradually  the  status  of  aliens  improved  until,  at  the 
present  time,  an  alien,  under  well  recognized  principles  of  inter- 
national law,  is  entitled,  at  the  very  least,  to  the  treatment  ac- 
corded nationals. 

The  exponents  of  the  theory,  that  it  is  an  assault  upon  the 
sovereignty  of  the  State  to  hold  it  internationally  accountable  for 
the  treatment  accorded  aliens  within  its  borders,  and  that  such 
matters  should  be  left  entirely  to  the  discretion  of  the  sovereign 
power,  are  now  distinctly  in  the  minority.-  The  generally  accepted 
theory  of  international  responsibility  holds  that  there  are  certain 
fundamental  rights  of  the  individual  alien  which  must  be  respected 
by  all  states. 

"States  are  legal  persons  and  the  direct  subjects  of  international 
law.  They  are  admitted  into  the  international  community  on  con- 
dition that  they  possess  certain  essemial  characteristics,  such  as  a 
defined  territory,  independence,  etc.    In  addition,  they  must  mani- 


1  A  very  clear  story  of  the  development  of  the  protection  of  aliens  may  be 
found  in  Borchard's  "Diplomatic  Protection  of  Citizens  Abroad,"  particularly 
in  Section  17. 

2  Mr.  .Tulius  Goebel,  Jr.,  in  an  article  "International  Responsibility  of 
States"  in  VIII  American  .lournal  Int.  Law,  p.  802,  traces  the  development  of 
the  modern  theory  of  responsibility,  and  presents  many  evidences  of  its 
general   acceptance. 


8 

test  their  power  to  exercise  jurisdiction  effectively  and,  as  we 
shall  see,  to  assure  foreigners  within  it  of  a  minimum  of  rights. 
This  minimum  standard  below  which  a  state  cannot  fall  without 
incurring  responsibility  to  the  other  members  of  the  international 
community  has  been  shaped  and  established  by  the  advance  of 
civilization  and  the  necessities  of  modern  international  intercourse 
on  the  part  of  individuals.  The  home  state  of  the  resident  alien 
is  concerned  not  with  the  legal  legitimacy  of  a  foreign  govern- 
ment, but  with  its  actual  ability  to  fulfill  the  obligations  which 
this  international  standard  imposes  upon  it.  The  resident  alien 
does  not  derive  his  rights  directly  from  international  law,  but 
from  the  municipal  law  of  the  state  of  residence,  though  inter- 
national law  imposes  upon  that  state  certain  obligations  which 
under  the  sanction  of  responsibility  to  the  other  states  of  the 
international  community,  it  is  compelled  to  fulfill.  When  the 
local  state  fails  to  fulfill  these  duties,  'when  it  is  incapable  of 
ruling,  or  rules  with  patent  injustice,'  the  right  of  diplomatic  pro- 
tection inures  to  those  states  whose  citizens  have  been  injured 
by  the  governmental  delinquency. 

"International  law  recognizes  on  the  part  of  each  member  of 
the  family  of  nations  certain  nonns  or  attributes  of  government 
for  the  purpose  of  assuring  the  rights  of  the  individual.  The 
independence  of  states,  with  the  right  of  administering  law  and 
justice  uncontrolled  by  other  states,  is  one  of  the  norms  by  which 
this  end  is  attained.  In  countries  which  habitually  maintain  ef- 
fective government,  the  protection  of  the  national  government  of 
a  resident  alien  is  usually  limited  to  calling  the  attention  of  the 
local  government  to  the  performance  of  its  international  duty. 
The  right,  however,  is  always  reserved,  and  in  the  case  of  less 
stable  and  well-ordered  governments  frequently  exercised,  of 
taking  more  effective  measures  to  secure  to  their  citizens  abroad 
a  measure  of  fair  treatment  conforming  to  the  international 
standard  of  justice.  While  the  right  of  every  state  to  exercise 
sovereignty  and  jurisdiction  within  its  territory  over  all  persons 
within  it  is  recognized,  foreign  nations  retain  over  their  citizens 
abroad  a  protective  surveillance  to  see  that  their  rights  as  indi- 
viduals receive  the  just  measure  of  recognition  established  by  the 
principles  of  international  law.     Diplomatic  protection,  therefore, 


is  a  complementary  or  reserved  right  invoked  only  when  the  state 
of  residence  fails  to  conform  with  this  international  standard. 

"The  rules  of  international  law  in  this  matter  fall  with  par- 
ticular severity  upon  those  countries  where  law  and  administration 
frequently  deviate  from  and  fall  below  this  standard  ;  for  the  fact 
that  their  own  citizens  can  be  compelled  to  accept  such  malad- 
ministration is  not  a  criterion  for  the  measure  of  treatment  which 
the  alien  can  demand,  and  international  practice  seems  to  have 
denied  these  countries  the  right  to  avail  themselves  of  the  usual 
defense  that  the  alien  is  given  the  benefit  of  the  same  laws,  the 
same  administration,  and  the  same  protection  as  the  national. 

"The  broad  principle  of  international  law  that  when  an  indi- 
vidual establishes  himself  in  a  foreign  state  he  renders  himself 
subject  to  the  territorial  jurisdiction  of  that  state  and  must 
normally  accept  the  institutions  which  the  inhabitants  of  the  state 
find  suitable  to  themselves,  must  be  viewed  in  its  relation  tO'  the 
complementary  principle  that  the  individual  in  question  still  owes 
allegiance  to  his  own  state  and  will  be  protected  by  that  state 
when  his  rights,  as  measured  not  by  the  local,  but  by  the  inter- 
national standard,  are  invaded. "^ 

Alpheus  Henry  Snow,  in  an  article,  "The  American  Philosophy 
of  Government,"-^  expounds  the  nature  of  these  fundamental 
rights. 

"The  truth  seems  to  be  that  when  an  individual  claims  that 
his  fundamental  rights  have  been  infringed  by  a  government, 
whether  the  government  is  his  own  or  a  foreign  one,  he  appeals 
neither  to  international  law  nor  to  national  law,  but  to  a  law  which 
is  supreme  over  all  peoples  and  all  nations,  and  which  grows  out 
of  our  common  human  nature  and  the  nature  of  human  society. 
This  law  no  people  or  nation  can  'create' ;  it  can  only  'recognize' 
it.  As  respects  rights  that  are  not  fundamental, — that  is,  which 
are  artificial  or  remedial,  each  individual  is  subject  to  the  rules 
of  international  law  or  of  national  law  according  to  the  nature 
of  the  case  and  according  to  the  citizenship  of  the  parties.  But 
as  respects  his  fundamental  rights,  each  individual  and  each  gov- 


3  Edwin   M.   Borchard    "Basic  Elements   of  Diplomatic  Protection   of  Citi- 
zens Abroad,"  7  Amer.  Jour.  Int.  Law,  p.  517. 

4  Amer.  Jour.    Int.   Law,   p.   201. 


lO 

ernment  is  subject  to  the  rules  of  the  fundamental  and  universal 
law  which  is  supreme  over  both  international  and  national  law, 
and  is  pervasive  throughout  the  whole  society  of  peoples  and 
nations  regardless  of  national  limits.  Though  the  American 
people  have  in  fact  secured  the  fundamental  rights  of  the  indi- 
vidual by  our  own  national  law,  through  constitutional  prohibi- 
tions, we  do  not  regard  these  fundamental  rights  as  created 
either  by  our  own  national  law  or  by  international  law,  but  by 
a  law  universally  pervasive  and  supreme  over  both,  which  we 
'recognize,'  and  which  we  consider  that  we  must  recognize  on 
penalty  of  reversion  to  barbarism.  One  may  adopt  the  religious 
hypothesis  and  call  this  supreme  universal  law  the  law  of  God,  or 
the  philosophical  hypothesis  and  call  it  the  law  of  nature,  or  the 
juridicial  hypothesis  and  call  it  the  law  of  human  society.  Perhaps 
the  simplest  way  out  of  the  difficulty  of  determining  the  source 
of  this  law  is  to  regard  it  as  a  law  made  by  human  society  as  an 
organized  unitary  community,  and  to  call  it  'the  fundamental  law,' 
imderstanding  by  this  that  law  which  is  supreme  over  all  other 
human  law,  whether  international,  national  or  municipal,  and 
which  deals  directly  with  the  rights  of  the  individual  man  as  a 
human  being  as  against  all  human  society.  As  Bonfils  and 
Fauchille  say,  slavery  is  abolished  everywhere  because  society 
in  general  feels  that  it  is  in  violation  of  fundamental  rights  of 
the  individual  nierely  as  a  human  being  regardless  of  the  citizen- 
ship, and  hence  destructive  of  all  human  society.  That  there 
are  rights  of  the  individual  which  he  has  merely  as  a  human  being 
and  which  follow  him  throughout  the  world,  is  proved  by  the 
fact  that  each  enlightened  human  being,  if  he  searches  his  own 
conscience,  finds  himself  compelled  so  to  believe.  The  existence 
of  this  law  cannot  be  proved  by  ordinary  methods  of  proof.  It 
must  be  accepted  as  an  axiomatic  and  self-evident  truth." 

It  must  be  said,  however,  that  the  student  of  international 
law  is  often  forced  to  the  conclusion  that  the  fundamental  rights, 
so  much  discussed  by  jurists,  are  neither  as  easily  enumerated 
nor  as  clearly  defined,  in  many  instances,  as  most  of  these  writers 
would  have  one  believe.  What  is  more  unfortunate  in  the  view 
of  those  who  seek  clarification  of  international  jurisprudence,  is 
the  fact  that  the  so-called  international  rights  represent  generally 


II 

the  rights  insisted  upon,  for  its  citizens,  by  a  stronger  government 
against  a  weaker.  After  all,  these  international  rights  vary  with 
the  changing  conceptions  of  national  government,  and  of  the  re- 
lation of  the  individual  to  the  group,  entertained  by  the  society 
of  the  more  conservative  nations.  The  world  does  seem  to  be 
drifting  steadily  toward  an  increase  in  the  control  permitted  to 
exist  by  society  over  its  individuals  ;  and  with  this  drift  there  must 
eventually  come  a  change  in  the  degree  to  which  a  nation  will  be 
held  internationally  accountable  because  of  the  control  which  it 
exercises  over  its  inhabitants.  Fundamental  international  rights 
there  are,  but  they  change  and  evolve  in  a  gradual  way.  so  that, 
at  a  given  time,  the  quantum  of  these  rights,  as  a  practical  matter, 
represents  the  commonly  accepted  ideas  of  the  family  of  strong 
nations  on  the  subject — these  nations  impressing  their  mutual  will 
upon  the  rest  of  the  world. 

In  recent  years,  the  United  States  has  developed  a  greater 
realization  of  the  necessity  of  international  responsibility  to  the 
rapid  development  of  amity  between  nations.  The  Great  War, 
and  the  peculiar  position  taken  by  the  United  States  in  it,  raised 
this  nation  to  a  high  plane  of  moral  leadership  in  world  affairs. 
On  the  other  hand,  the  Mexican  revolutions  since  19 lo  have 
drawn  Mexico  away  from  world  events ;  and,  forcing  the  nation's 
attention  almost  exclusively  on  don^estic  affairs,  have  induced 
an  unbalanced  and  unnatural  increase  in  the  nationalistic  spirit 
of  the  government  and  people.  We  encounter,  then,  a  difference 
of  philosophies — the  United  States  with  a  nationalism  intense 
enough,  but  modulated  by  its  recent  participation  in  world  events 
to  a  greater  appreciation  of  internationalism,  and  Mexico  with 
its  nationalism  intensified  to  a  point  where,  in  its  aggravated  state, 
nationalism  has  almost  eclipsed  internationalism. 

The  rule  that  the  fundamental  rights  of  the  individual  must 
be  respected,  is  accompanied  by  the  rule  that  a  State  will  gen- 
erally be  held  responsible  only  for  the  measure  of  protection  of 
the  rights  of  foreigners  which  it  is  able  to  exercise  in  view  of 
the  circumstances  and  its  condition.  It  is  almost  solely  in  the 
interpretation  and  application  of  these  rules  that  authorities  differ 
and  diplomatic  departments  of  governments  come  to  issue. 

The  Supreme  Court  of  the  United  States  in  the  case  of  Logan 


12 

V.  The  United  States-^  held  that  there  are  certain  fundamental 
rights,  recognized  and  declared  but  not  granted  or  created  by  the 
Constitution,  and  thereby  guaranteed  against  violation  or  infringe- 
ment by  the  United  States,  or  by  the  States,  as  the  case  may  be, 
and  some  observe  that  these  "fundamental  rights"  are  not  limitable 
by  municipal  regulation. 

In  the  case  of  Kepner  v.  United  States*^,  the  Supreme  Court  of 
the  United  States  gave  its  approval  to  a  collation  of  the  provisions 
of  the  Constitution  of  the  United  States  made  in  the  instructions 
of  the  President  to  the  Commission  for  taking  over  the  civil  gov- 
ernment of  the  Philippines  from  the  Military  Authorities,  dated 
April  7,  1900.  The  instructions  read^:  "There  are  certain  great 
principles  of  government  which  have  been  made  the  basis  of  our 
governmental  system,  which  we  deem  essential  to  the  rule  of  law 
and  the  maintenance  of  individual  freedom,  and  of  which  they 
have,  unfortunately,  been  denied  the  experience  possessed  by  us ; 
that  there  are  also  certain  practical  rules  of  government  which 
we  have  fonnd  to  be  essential  to  the  preservation  of  these  great 
princii^les  of  liberty  and  law,  and  that  these  principles  and  these 
rules  of  government  must  be  established  and  maintained  in  their 
islands  for  the  sake  of  their  liberty  and  happiness,  however  much 
they  may  conflict  with  the  customs  or  laws  of  procedure  with 
which  they  are  familiar." 

The  collation  is  as  follows : 

"That  no  person  shall  be  deprived  of  life,  liberty  or  property 
without  due  process  of  law ;  that  private  property  shall  not  be 
taken  for  public  use  without  just  compensation  ;  that  in  all  criminal 
prosecutions  the  accused  shall  enjoy  the  right  to  a  speedy  and 
public  trial,  to  be  informed  of  the  nature  and  cause  of  the  accusa- 
tion, to  be  confronted  with  the  witnesses  against  him,  to  have 
compulsory  process  for  obtaining  witnesses  in  his  favor,  and  to 
have  the  assistance  of  counsel  for  his  defence ;  that  excessive  bail 
shall  not  be  required,  nor  excessive  fines  imposed,  nor  cruel  and 
unusual  punishment  inflicted ;  that  no  person  shall  be  put  twice 
in  jeopardy  for  the  same  offence  or  be  compelled  in  any  criminal 

5  144  U.   S.  2G.'?,  293. 

6  195  U.   S.  100,  123. 

7  Opiuion    of  Justice   Day,   p.   122. 


13 

case  to  be  a  witness  against  himself ;  that  the  right  to  be  secure 
against  unreasonable  searches  and  seizures  shall  not  be  violated ; 
that  neither  slavery  nor  involuntary  servitude  shall  exist  except 
as  a  punishment  for  crime ;  but  no  bill  of  attainder  or  ex  post  facto 
law  shall  be  passed ;  that  no  law  shall  be  passed  abridging  the 
freedom  of  speech  or  of  the  press  or  of  the  rights  of  the  people 
to  peaceably  assemble  and  petition  the  government  for  a  redress 
of  grievances ;  that  no  law  shall  be  made  respecting  an  estal^lish- 
ment  of  religion  or  prohibiting  the  free  exercise  thereof,  and  that 
the  free  exercise  and  enjoyment  of  religious  profession  and 
worship  without  discrimination  or  preference  shall  forever  be 
allowed." 

Justice  Day,  in  his  opinion,  comments  as  follows  upon  this 
collation : 

"These  words  are  not  strange  to  the  American  lawyer  or 
student  of  constitutional  history.  They  are  the  familiar  language 
of  the  Bill  of  Rights,  slightly  changed  in  form,  but  not  in  sub- 
stance, as  found  in  the  first  nine  amendments  to  the  Constitution 
of  the  United  States,  with  the  omission  of  the  provision  preserving 
the  right  to  trial  by  jury  and  the  right  of  the  people  to  bear  arms, 
and  adding  the  prohibition  of  the  Thirteenth  Amendment  against 
slavery  or  involuntary  servitude  except  as  a  punishment  for  crime, 
and  that  of  Art.  i,  s.  9,  to  the  passage  of  bills  of  attainder  and 
ex  post  facta  laws.  These  principles  were  not  taken  from  the 
Spanish  law ;  they  were  carefully  collated  from  our  own  Consti- 
tution ;  and  embody  almost  verbatim  the  safeguards  of  that  instru- 
ment for  the  protection  of  life  and  liberty." 

(The  Supreme  Court  has  held  these  constitutional  prohibitions 
to  be  "fundamental  rights."^) 

The  Mexican  Constitution,  in  Chapter  i,  of  Title  i,  contains 
provisions  varying  but  little,  in  essence,  from  those  of  the  Consti- 
tution of  the  United  States  protecting  fundamental  rights,  and, 
with  a  few  exceptions,  to  be  found  principally  in  Article  27,  the 
Mexican  Constitution  may  be  considered  in  accord  with  that  of 


8    See  Kepner  v.  United  States,  19.5  U.   S.,  100.  12.3;   Dorr  v.   United   States, 
195  U.  S.  138,  144,  148;  Hawaii  v.  Manlsicbi,  190  U.  S.  197,  217. 


14 

the  United  States.  It  is  interesting  to  note,  however,  that  the 
Mexican  Constitution  of  1917  differs  from  its  predecessor  of  1857 
in  several  important  respects  on  the  subject  of  fundamental  rights. 
Section  i  of  Title  i  of  the  Constitution  of  1857  is  entitled:  "Of 
the  Rights  of  Man."  The  first  article  of  this  section  reads  as 
follows :  "The  Mexican  people  recognize  that  the  rights  of  man 
are  the  basis  and  object  of  social  institutions.  Consequently  they 
declare  that  all  the  laws  and  all  the  authorities  of  the  country  mubt 
respect  and  maintain  the  guarantees  which  the  present  constitu- 
tion grants."  This  provision  seems  to  be  a  recognition  of  the 
fundamental  rights  internationally  accorded  man  and  known  to 
Anglo-Saxon  constitu':ional  law  as  the  Bill  of  Rights  provisions. 

The  Constitution  of  19 17  adopted  a  new  title  for  the  coi"- 
responding  section,  calling  it  "Title  i.  Chapter  i,  Of  Personal 
Guarantees."  That  this  change  was  not  accidental  but  intended, 
is  indicated  by  the  changed  wording  of  Article  i  of  this  chapter: 
"Every  person  in  the  United  States  oi  Mexico  shall  enjoy  all 
guarantees  granted  by  this  Constitution;  these  shall  neither  he 
abridged  nor  suspended  except  in  such  cases  and  under  such  con- 
ditions as  are  herein  provided."  A  comparison  of  these  sections 
of  the  two  constitutions  is  likely  to  convince  the  reader  that  the 
Constitution  of  1917  was  adopted  by  a  nation  which  had,  through 
its  years  of  revolution  and  political  turmoil,  lost  its  sense  of  inter- 
nationalism and  had  come  to  an  unduly  intensified  nationalism. 
Article  i  of  Section  i  of  Title  i  of  the  Constitution  of  1857  un- 
doubtedly expressed,  in  conformance  with  the  basic  philosophy 
of  its  creators,  the  intention  that  the  subsequently  enumerated 
rights  of  the  individual  should  serve  merely  as  a  collation,  as 
accurate  as  possible,  of  the  fundamental  rights  of  man,  which  are 
supreme  over  any  constitution.  The  Constitution  of  the  United 
States,  by  the  Ninth  Amendment,  guarantees  to  the  people  their 
fundamental  rights  in  so  many  words : 

"The  enumeration  and  the  constitution  of  certain  rights,  shall 
not  be  construed  to  deny  or  disparage  others  obtained  by  the 
people." 

Article  i  of  Chapter  i  of  Title  i  of  the  Mexican  Constitution 
of  1917  indicates  an  intention  on  the  part  of  its  creators,  to  dis- 


i 


15 

tinctly  I'imit  the  fundamental  rights  of  man  to  the  particular  rights 
enumerated  in  the  Constitution. 

A  comparison  of  the  terms  of  the  two  constitutions  at  length 
is  not  here  possible.  Suffice  to  say,  the  language  of  the  Constitu- 
tion of  1917,  when  compared  with  the  language  of  the  correspond- 
ing sections  of  the  earlier  constitution,  does  substantiate  the 
theory  above  advanced  that  the  creators  of  the  existing  constitu- 
tion intended  to  limit  individual  rights  to  those  specifically  enumer- 
ated therein. 

If  it  is  true  that  there  are  fundamental  rights  which  are  not 
created  by  legislation  but  can  only  be  recognized  by  it,  it  would 
seem  that  the  present  Mexican  Constitution,  in  so  far  as  it  attempts 
to  make  its  enumeration  of  fundamental  rights  exclusive,  cannot 
succeed. 

As  a  matter  of  fact,  there  is  very  little  actual  conflict  between 
jurists  and  statesmen  in  regard  to  the  existence  of  particular 
fundamental  rights.  Consequently,  the  constant  utterance  by  pub- 
licists and  statesmen  of  the  commonly-accepted,  platitudinal  prin- 
ciples of  constitutional  and  fundamental  law,  are  of  no  particular 
value.  It  is  in  the  application  of  the  commonly-accepted  principles 
that  the  conflict  arises.  When  the  difference  is  between  Latin 
and  Anglo-Saxon  jurists,  conflict  in  interpreting  these  funda- 
mental principles  is  probably  to  be  accounted  for  largely  by  the 
influence,  respectively,  of  the  Civil  law  and  the  Anglo-Saxon  com- 
mon law. 

It  is  unfortunately  true  that  in  many  instances  the  more  pow- 
erful nations,  while  insisting  on  the  responsibility  of  weaker  states, 
have  denied  responsibility  when  they  themselves  were  indicted. 
The  diplomatic  history  of  the  United  States  presents  examples  of 
this  inconsistency.  This  country  has  always  been  ready  to  press 
claims  for  injuries  and  has  been  uniformly  successful  in  obtaining 
acknowledgments  of  liability,  but  has  occasionally  reiuidiated  lia- 
bility when  itself  called  to  account,  even  where  it  has  actually 
granted  indemnity.  Cases  of  this  latter  variety  are  the  Spanish 
Claims  of  1850,  the  Italian  Lynchings  and  the  Chinese  cases.  This 
inconsistent  policy  of  the  United  States  and  other  nations  has 
been  a  great  discredit  to  their  statesmanship  and  much  to  be  re- 
gretted as  an  obstacle  to  the  clarification  of  international  law. 


i6 

The  Latin-American  countries  have  been  the  staunches!  sup- 
porters of  the  theory  of  non-responsibiHty.  They  have  been 
forced  to  this  stand  by  the  frequency  with  which  they  have  been 
visited  by  insurrections,  uprisings  and  banditry,  and  have,  by 
necessity,  been  compelled  to  develop,  through  their  statesmen  and 
publicists,  a  justification  for  their  reiterated  attempts  to  deny  lia- 
bility. 

Furthermore,  Latin- America  objects  to  the  theory  of  responsi- 
bility because  of  the  conviction  existing  in  the  countries  of  the 
south  that  the  enforcement  of  international  responsibility  is  usually 
only  a  pretext  for  the  securing  of  economic  advantages  to  the 
citizens  of  the  interposing  nation.  The  Latin-Americans  fear  a 
loss  of  sovereignty  and  independence  through  the  frequent  appli- 
cation of  the  theory  of  responsibility.  Mexicans,  especially,  seem 
to  believe  that  "might  makes  right"  is  the  foundation  of  the  re- 
sponsibility theory,  and  that  the  United  States,  in  particular,  usu- 
ally acts  to  her  own  advantage  and  with  no  consistent  adherence  to 
international  and  moral  principles.  It  is  unfortunate  that  this 
misinterpretation  of  the  motives  of  the  United  States  exists  in 
Mexico.  The  United  States  has  occasionally  misapplied  interna- 
tional law,  and  has  in  several  instances  been  guilty  of  breaches 
of  good  international  practice ;  but  it  is  undoubtedly  true  that  the 
record  of  the  United  States  in  its  foreign  relations,  when  com- 
pared with  those  of  others  of  the  powerful  nations,  is  surprisingly 
free  from  unfairness  or  international  injustice.  The  resentment 
of  Mexicans  and  other  Latin-Americans  toward  foreign  interposi- 
tion has  some  ground  in  fact,  because  this  interposition  has  often 
been  arbitrary,  impolitic  and  abusive.  But  it  is  submitted  that 
this  resentment  against  diploniatic  interposition  by  the  United 
States  is  not  well  grounded  in  fact. 

There  is  small  justification  in  modern  international  law  for 
the  constant  attempts  of  Latin- America  to  avoid  liability;  and 
these  attempts  at  the  repudiation  of  responsibility  have  invariably 
proved  futile. 


17 
B. 

THE  ATTEMPT  OF  LATIN-AMERICAN  STATES  TO 
EVADE  INTERNATIONAL  RESPONSIBILITY  BY  MU- 
NICIPAL OR  CONSTITUTIONAL  REGULATION. 

Latin- American  history  since  1852,  when  Venezuela  tried  to 
spread  the  idea  through  Latin-America,  presents  a  consistent  at- 
tempt on  the  part  of  many  of  the  more  tempestuous  and  revolu- 
tion-ridden of  the  Latin-American  states  to  evade  international 
responsibilities  through  the  insertion,  in  treaties  contracted  be- 
tween themselves,  and  in  their  constitutional  law  and  municipal 
law,  of  provisions  limiting  the  state  liabiHty  for  injuries  to  aliens. 

The  Institute  of  International  Law  in  1909  expressly  con- 
demned the  making  of  treaties  relieving  nations  of  responsibility 
as  creating  bad  precedents.  However,  the  parties  to  treaties  limit- 
ing the  rights  of  the  respective  nationals  of  one  country  in  the 
territory  of  another,  would  be  bound  thereby.  Regulations  of 
municipal  and  constitutional  law  of  the  kind  described  above  have 
proved  futile  against  the  claims  of  citizens  of  European  states  and 
of  the  United  States. 

Mexico's  mos.t  recent  attempt  to  thus  evade  international  re- 
sponsibility is  found  in  the  new  Constitution  of  1917,  Article  27, 
which  reads  in  part  as  follows : 

"Legal  capacity  to  acquire  ownership  of  lands  and  waters  of 
the  nation  shall  be  governed  by  the  following  provisions : — 

"i.  Only  Mexicans  by  birth  or  naturalization  and  Mexican 
companies  have  the  right  to  acquire  ownership  in  lands,  waters 
and  their  appurtenances,  or  to  obtain  concessions  to  develop 
mines,  waters  or  mineral  fuels  in  the  Republic  of  Mexico.  The 
Nation  may  grant  the  same  right  to  foreigners,  provided  they 
aeree  before  the  Department  of  Foreign  Affairs  to  be  considered 
Mexican  in  respect  to  such  property,  and  accordingly  not  to  in- 
voke the  protection  of  their  Governments  in  respect  to  the  same, 
under  penalty,  in  case  of  breach,  of  forfeiture  to  the  Nation  of 
property  so  acquired." 

The  above  constitutional  provision  has  been  characterized  by 


i8 

Mexicans  as  one  of  the  triumphs  of  the  revolution,  and  as  a  de- 
stroyer of  the  alleged  favoritism  shown  to  foreigners  under  the 
regime  of  the  late  Porfirio  Diaz,  equalizing  the  position  of  nationals 
and  foreigners  in  the  enjoyment  of  property  rights. 

Such  regulations  and  provisions  are  in  contravention  of  estab- 
lished rules  of  international  law  and  are  ignored  or  denied  by  the 
non-Latin-American  States  of  the  world. 

"The  United  States  has  vigorously  opposed  the  attempt  of  the 
Latin-American  comitries  to  pass  upon  the  scope  of  their  interna- 
tional duty.    As  was  said  by  Secretary  of  State  Bayard,  in  1887 : 

'li  a  government  could  set  up  its  ow-n  municipal  laws 
as  the  final  test  of  its  international  rights  and  obligations, 
then  the  rules  of  international  law  would  be  but  the 
shadow  of  a  name,  and  would  afford  no  protection  either 
to  states  or  to  individuals.  It  has  been  constantly  main- 
tained and  also  admitted  by  the  Government  of  the 
United  States  that  a  government  can  not  appeal  to  its 
municipal  regulations  as  an  answer  to  demands  for  the 
fulfillment   of  international   duties.' 

"The  principle  that  equality  of  treatment  between  nationals 
and  aliens  releases  a  state  from  pecuniary  responsibility  for  injury 
to  aliens  is  conditioned  \ipon  the  fact  that  its  administration  of 
justice  satisfies  the  standard  of  civilized  justice  established  by 
international  law.  Foreign  states,  however,  undertake  to  judge 
for  themselves  as  to  the  local  state's  compliance  wath  international 
standards — a  defect  in  the  systetn  which  arbitration  has  done 
much  to  remedy. 

"The  United  States  has  never  taken  the  position  that  one  who 
acquires  a  residence  in  a  foreign  country  does  so  at  his  peril  and 
assumes  the  risk  of  ill-treatment  or  injur}-  identically  with  citizens. 
Where  a  state  does  not  normally  possess  or  is  not  disposed  to 
employ  sufficient  power  to  prevent  injun-  to  the  alien,  the  state's 
responsibility  is  considered  as  established;  the  delinquency  may 
occur  either  in  its  legislative,  executive,  or  judicial  departments. 
One  reason  why  the  alien  is  not  bound  to  submit  to  unjust  treat- 
ment equally  with  nationals,  against  which  the  national  has  no 
judicial  redress,  is  because  the  latter  is  presumed  to  have  a 
political  remedy,  whereas  the  alien's  inability  to  exercise  political 


19 

rights  deprives  him  of  one  of  the  principal  safeguards  of  the 
rights  of  the  citizen.  For  this  reason  diplomatic  interposition  may 
be  invoked  by  the  alien  for  the  enforcement  of  his  rights.  The 
alien,  therefore,  is  not  bound  to  accept  the  treatment  accorded  to 
nationals  if  such  treatment  is  in  violation  of  the  ordinary  princi- 
ples of  civilized  justice,  and  notwithstanding  the  fact  that  the 
national  has  no  immediate  remedy  against  the  injustice. "^ 

Whether  or  not  limitations  in  the  constitutional  or  municipal 
law  of  one  Latin-American  state  would  be  binding  upon  the 
others  having  similar  limitations  on  the  rights  of  aliens,  is  a  de- 
batable question.  In  the  case  of  those  nations  which  adopted  the 
resolutions  of  the  several  Pan-American  Congresses  on  claims  and 
diplomatic  intervention  wherein  attempts  were  made  to  incorpo- 
rate into  "American  Law"  limitations  on  the  rights  of  aliens,  it 
might  be  successfully  contended  that  the  signator}?^  nations  v/ere 
bound  morally  and  in  international  law  by  these  regulations,  at 
least  as  against  each  other. 


1     Borehard's   Diplomatic    Pro.   of   Cit.   Ab.,    pp.   104   to   107. 


20 
C. 

DE  JURE,  DE  FACTO  AND  LOCAL  DE  FACTO  GOV- 
ERNMENTS. BRIEF  REVIEW  OF  MEXICAN  HISTORY 
BEGINNING  WITH  THE  OVERTHROW  OF  DIAZ.  A 
DISCUSSION  OF  THE  NATURE  OF  THE  SUCCESSIVE 
GOVERNMENTS  AND  REVOLUTIONARY  BODIES  AND 
OF  THE  LIABILITY  OF  THE  PRESENT  GOVERNMENT 
FOR  THE  ACTS  OF  EACH. 

Before  summarizing-  the  recent  historical  events  in  Mexico 
and  their  rcbuUs  as  affecting  the  Hability  of  the  government  it 
will  be  well  to  point  out  the  respective  character  and  attributes 
of  de  jure  and  de  fawto  governments.  A  de  jure  government,  as 
the  term  implies,  is  a  legal  government  which  has  succeeded  to 
the  sovereign  power  hy  legal  means,  while  a  de  facto  government  is 
one  actually  holding  the  reins  of  power  while  not  of  legal  origin. 
A  usurping  government  which  has  overturned  the  existing  legal 
order  and  succeeded  to  the  actual  power  would  be  de  facto. 
Whether  or  not  a  de  facto  government  exists  is  a  question  of  fact. 
Elements  determining  its  existence  are  the  extent  and  supremacy 
of  its  power,  acknowledgment  by  the  people  of  this  power,  and 
the  recognition  accorded  it  by  foreign  nations.  A  de  facto  gov- 
ernment may  develop  into  a  de  jure  government,  the  transition 
being  brought  about  generally  by  its  continuance  in  the  saddle, 
the  sustained  support  given  it  by  the  nation  and  the  recognition 
accorded  it  by  foreign  powers. 

It  is  important  to  note  that  the  burden  of  establishing  the 
de  facto  nature  of  the  g-overnment  and  its  consequent  liability 
falls  on  the  claimant.  Recognition  by  the  claimant's  nation  does 
not  prove  its  de  facto  character.  It  is  a  question  whether  or  not 
failure  of  the  claimant's  country  to  recognize  the  de  facto  nature 
of  a  revolutionary  government  precludes  the  claimant  from  assert- 
ing its  de  facto  character. 

Both  de  jure  and  de  facto  g-ovemments  succeed  to  the  liabili- 
ties and  obligations  of  previous  de  jure  or  de  facto  governments. 
In  addition,  unon  tbe  success  of  a  revolutionary  movement,  respon- 


i 


21 

sibility  for  the  acts  of  the  revolutionists  becomes  merged  into  the 
liability  of  the  dc  facto  government  created  by  the  revolution. 

The  principles  briefly  discussed  above  in  respect  of  de  facto 
governments  apply  only  to  general  de  facto  governments.  An 
important  distinction  between  these  and  local  de  facto  govern- 
ments must  be  made.  The  latter  are  characterized  as  exercising 
control  over  part  of  the  country  only.  The  liability  of  the  fed- 
eral government  for  the  acts  of  the  local  de  facto  government  is 
generally  denied. 

"A  temporary  occupant  or  local  dc  facto  government  car- 
ries on  the  functions  of  government,  supported  usually  directly 
or  indirectly  by  military  force.  It  may  appoint  all  necessan- 
officers  and  designate  their  powers,  may  prescribe  the  revenues 
to  be  paid  and  collect  them,  and  may  administer  justice.  Foreign- 
ers must  perforce  submit  to  the  power  which  thus  exercises 
jurisdiction,  and  a  subsequent  de  jure  government  cannot  expose 
them  to  penalties  for  acts  which  were  lawful  and  enforced  by 
the  de  facto  government  when  done.  The  temporary  de  facto 
government  may  legislate  on  all  matters  of  local  concern,  and  in 
so  far  as  such  legislation  is  not  hostile  to  the  subsequent  de  jure 
government  which  displaces  it,  its  laws  will  be  upheld.  A  military 
occupant  as  a  general  rule  may  not  vary  or  suspend  laws  affecting 
property  and  private  personal  relations  or  those  which  regulate 
the  moral  interests  of  the  community.  If  he  does,  his  acts  in  so 
doing  cease  to  have  legal  effect  when  the  occupation  ceases.  Po- 
litical and  administrative  laws  are  subject  to  suspension  or  modifi- 
cation in  case  of  necessity. 

"The  collection  of  taxes  and  customs  duties  within  the  terri- 
tory and  during  the  period  of  occupancy  of  the  local  dc  facto 
government  relieves  merchants  and  tax-payers  from  a  subsequent 
second  payment  upon  the  same  goods  to  the  succeeding  de  jure 
government.  Such  a  temporary  government  may  levy  contribu- 
tions on  the  inhabitants  for  the  purposes  of  carrv'ing  on  the  war, 
but  they  must  not  savor  of  confiscation.  It  may  seize  property 
belonging  to  the  state  and  may  use  it.  It  may  receive  money  due 
the  state  and  give  receipts  in  the  name  of  the  state.  This,  how- 
ever, applies  only  to  debts  payable  within  the  territory  and  period 
of  occupancy. 


22 

"Debts  due  by  the  state  cannot  be  confiscated  or  the  interest 
sequestered  by  a  temporary  occupant,  and  private  property  must 
be  respected.  The  occupant  or  local  de  facto  government  cannot 
alienate  any  portion  of  the  public  domain.  The  fruits  thereof 
may  be  sold,  but  only  thait  part  accruing  during  the  period  of 
occupancy.  A  local  de  facto  government  may  become  the  owner 
of  movables,  which  it  may  sell  and  hypothecate.  A  succeeding 
government  takes  such  mortgaged  property  as  rightful  owner  sub- 
ject to  the  liens  thus  created  in  good  faith.  As  a  general  rule, 
however,  a  succeeding  de  jure  government  is  not  liable  for  debts 
contracted  by  a  displaced  local  de  facto  government.  A  person 
dealing  with  a  local  de  facto  government  assumes  the  risk  of  his 
enterprise.  The  de  facto  government  may  issue  paper  money, 
and  private  contracts  stipulating  for  payment  in  such  money  will 
be  enforced  in  the  courts  of  the  succeeding  de  jure  government. 
Under  compulsion,  a  government  has  at  times  admitted  liability 
for  the  wrongful  acts  of  previous  local  de  facto  governments."^ 

Porfirio  Diaz  was  elected  in  1910  to  his  eighth  term  as  Presi- 
dent of  the  Republic  of  Mexico.  Shortly  after  his  election  an 
insurrectory  movement  started  in  northern  Mexico  which  in- 
creased in  momentum  and  finally  led  to  the  resignation  of  Diaz  on 
March  18,  191 1,  and  the  designation  of  Francisco  de  la  Barra  as 
President  ad  interiin.  De  la  Barra's  short  administration  was  that 
of  a  de  facto  government.  Madero,  who  had  headed  the  revolu- 
tionary movement  against  Diaz  was  elected  on  October  15th  to 
the  presidency  and  continued  the  ad  interiin  de  facto  government, 
succeeding  thereby  to  the  obligations  and  liabilities  of  the  regular 
de  jure  Diaz  government  as  well  as  of  the  de  facto  de  la  Barra 
government.  Madero  did  not  control  the  whole  country.  Large 
sections  of  Mexico  were  in  continued  and  open  revolt  against 
nim  from  the  very  beginning  of  his  regime.  It  can  hardly  be 
doubted  that  his  was  the  de  facto  central  government,  but  having 
d!i  no  time  been  in  control  of  the  entire  country-  it  might  seriously 
be  doubted  that  his  government  was  responsible  for  the  acts  of 
the  scattered  outstanding  revolutionists.  However,  as  most  of 
these  revolutionists  joined  in  one  of  the  later  revolutions  and  so 


1     From   article  by  Edwin   M.   Borchard  in   the  Chicago   Legal   News,   May 
31,   1917,   "International    Pecuniary    Claims  Against  Mexico." 


23 

aided  in  effecting  the  overthrow  of  the  central  government,  Ha- 
bihty  for  the  larger  part  of  the  acts  of  these  revolutionary  bodies 
evenitually  became  merged  in  the  central  government  through  its 
participation  in  eventually  successful  revolutionairy  movements. 

On  February  8,  1913,  Victoriano  Huerta  who  commanded  the 
government  forces  deserted  his  chief  and  went  over  to  the  rebels. 
The  revolution  was  carried  into  Mexico  City,  led  chiefly  by 
Huerta  and  Felix  Diaz,  a  nephew  of  the  former  President. 
Madero  was  captured  and  forced  to  resign  on  February  13,  1913. 
Several  days  thereafter  Madero  and  Vice-President  Suarez  were 
shot  and  killed.  Under  the  Mexican  Constitution  the  succession 
went  to  Pedro  Lascurain,  the  Minister  of  Foreign  Affairs,  who 
appointed  General  Huerta  Minister  of  the  Interior.  Lascurain 
then  resigned  and  Huerta  became  provisional  president.  There- 
after the  United  States  consistently  refused  recognition  to  Huerta, 
although  recognition  was  accorded  him  by  several  of  the  other 
Powers. 

In  the  mea,ntime  Venustia.no  Carranza  had  started  a  revolution 
in  the  State  of  Coahuila,  of  which  he  was  Governor.  On  March 
26,  1913,  he  proclaimed  the  "Plan  of  Guadalupe,"  which  asserted 
that  Huerta  had  acted  treasonably  and  which  named  Carranza 
First  Chief  of  the  Constitutional  Army  and  depositary  of  the 
executive  power  when  that  Army  should  occupy  Mexico  City. 
Villa,  Zapata  and  other  revolutionists  later  joined  Carranza  and 
contributed  to  the  success  of  his  movement.  It  seems  clear,  then, 
that  for  the  acts  of  these  other  revolutionary  leaders  and  their 
followers  committed  in  aid  of  Carranza's  revolutionary  movement, 
his  government,  upon  succeeding  to  the  de  facto  control  of  the 
country,  was  responsible.  For  their  acts  after  Carranza's  acquisi- 
tion oi  the  central  power,  a  different  rule  would  apply.  Carranza's 
government  would  probably  be  absolved  from  liability  regarding 
the  acts  of  these  revolutionary  bodies  committed  after  his  entry 
into  Mexico  City  on  the  ground  that  they  consisted  of  inde- 
pendent revolutionary  movements  not  acting  with  him  but  acting 
against  him. 

President  Wilson's  attempt  in  July,  1913.  to  volunteer  the  good 
offices  of  the  United  States  in  the  political  confusion  bv  sending 
to  Mexico  the  Hon.  John  Lind,  formerly  Governor  of  Minnesota, 


24 

proved  fruitless,  and  President  Wilson  continued  in  his  speeches 
terming  Huerta  as  "a  mere  military  despot." 

In  April,  1914,  occurred  the  regrettable  Vera  Cruz  incident 
and  intervention  by  the  United  States.  The  events  which  followed 
resulted  successively  in  the  forced  resignation  of  Huerta,  the 
setting  up  of  the  makeshift  government  of  Francisco  Carbajal 
and  the  proclamation  of  General  Gutierrez  as  provisional  presi- 
dent. Villa  and  Zapata  agreed  to  the  selection  of  Gutierrez  as 
President,  but  Carranza  refused  to  give  up  his  claim  to  the  presi- 
dency. After  considerable  turmoil  and  some  fighting  Carranza's 
supporter,  Obregon,  defeated  Villa  at  Celaya  on  April  2,  191 5, 
and  broke  the  opposition  to  Carranza's  supremacy.  On  October 
19th  the  Carranza  government  was  recognized  by  the  United 
States  as  the  "de  facto  Government  of  Mexico." 

On  August  31,  1917,  Carranza's  government  received  the  de 
jure  recognition  of  the  United  States.^ 

With  the  beginning  of  1920  opposition  to  Carranza  was  quietly 
but  surely  intensifying.  When,  in  March,  Carranza  presented 
P>onillas  as  a  candidate  for  the  presidency,  he  hastened  his  own  de- 
struction. On  April  9th  the  leaders  of  the  forthcoming  revolu- 
tion— de  la  Huerta,  Calles,  Salvador  Alvarado,  Obregon  and 
others, — issued  the  plan  of  "Agua  Prieta,"  declaring  President 
Carranza's  attitude  and  conduct  unconstitutional  and  proclaiming 
support  of  the  191 7  Constitution.  The  revolution  spread  until 
Carranza  was  compelled  to  flee  on  May  9th.  On  May  22nd 
Carranza  was  killed.  Thereafter  de  la  Huerta  was  duly  and  le- 
gally elected  provisional  president  under  section  84  of  the  19 17 
Constitution.  In  September,  1920,  General  Alvaro  Obregon,  at 
a  popular  election,  was  overwhelmingly  elected  President  of  the 
Republic.     He  was  inaugurated  on  December  ist,  1920. 

In  accord  with  the  general  principles  of  governmental  succes- 
sion and  the  liability  of  the  succeeding  government  for  the  acts 
of  its  predecessors,  the  present  government  nf  President  Obregon, 
de  jure,  though  unrecognized  as  yet  by  the  United  States,  would 
succeed  to  the  liabilities  of  the  previous  de  la  Huerta  and  Carranza 
regimes.  In  the  liabilities  of  the  Carranza  regime  would  be  in- 
cluded liability  for  the  acts  of  the  revolutionists  who  joined  or 

2     See  Getjen  v.  Central  Leather  Co.,  246  U.  S.  297. 


i 


25 

aided  in  the  overthrow  of  General  Huerta.  Similarly  in  the  lia- 
bilities to  which  the  Obregon  Government  would  succeed  from 
the  de  la  Huerta  Government  would  be  included  the  liability  aris- 
ing from  the  acts  of  those  revolutionists  who  aided  or  joined  in 
the  overthrow  of  General  Carranza. 

It  is  well  settled  that  a  nation  is  not  responsible  for  the  acts  of, 
and  services  rendered  to,  revolutions  which,  though  ultimately 
unsuccessful,  were,  at  the  time  of  the  acts  or  services,  beyond  the 
power  of  the  government  to  control,  and  so  the  Mexican  Gov- 
ernment would  clearly  not  be  liable  for  the  acts  of.  and  services 
rendered  to,  any  of  the  revolutionary  bodies  committed  or  rendered 
during  a  period  when  this  movement  had  temporarily  been  beyond 
suppression  by  the  federal  government,  and  which  had  not  par- 
ticipated in  any  revolution  which  was  eventually  successful  in 
succeeding  to  the  Federal  de  facto  or  de  jure  power.  However, 
it  is  equally  clear  that  the  government  created  through  revolution 
is  .responsible  as  well  for  the  acts  of  and  services  rendered  to 
the  revolution  as  for  those  of  the  preceding  de  facto  or  de  jure 
government.  It  is  interesting  to  note  here  that  the  successful 
revolutionists  would  even  appear  to  be  bound  from  the  beginning 
of  their  movement  by  the  stipulations  of  previously  existing  na- 
tional treaties. 

The  acts  of  a  general  de  facto  government  would  vmdoubtedly 
bind  succeeding  governments,  but  as  above  noted  the  liability  of 
the  succeeding  general  government  for  the  acts  of  a  local  de  facto 
government  is  greatly  limited.  The  administration  of  Huerta 
presents  interesting  questions  in  view  of  this  rule.  Grave  doubts 
have  been  expressed  regarding  the  legality  of  Huerta's  assump- 
tion of  power.  If  the  procedure  above  described  made  him  a 
legitimate  constitiTtional  President  his  government  undoubtedly 
would  have  bound  the  nation.  If  he  was  merely  a  usurper,  his 
government  probably,  at  its  inception  at  least,  ruled  as  a  de  facto 
government.  While  his  government  probably  started  as  a  general 
de  facto  government  it  became  gradually  weakened  through  the 
growing  success  of  the  opposition  and  became  eventually  nothing 
more  than  a  local  de  facto  government.  As  against  those  countries 
v.'hich  recognized  Huerta's  as  the  general  de  facto  government  it 
would  probably  be  difficult  for  any  successor  Mexican  administra- 


26 

tion  to  limit  its  liabilities  arising  out  of  the  Huerta  regime  on  tlie 
theory  that  it  was  eventually  only  a  local  de  facto  government. 
However,  against  the  United  States,  and  such  other  governments 
as  refused  to  recognize  Huerta  in  any  way,  this  theory  should  be 
successfully  applied  in  limiting  the  Federal  government's  responsi- 
bility for  the  acts  of  and  services  rendered  to  General  Huerta.  at 
least  during  the  latter  part  of  his  administration. 

It  is  interesting  to  note,  in  this  connection,  that  in  all  the  recent 
conversations  between  representatives  of  the  Mexican  Govern- 
ment and  other  persons  regarding  the  external  debts  of  Mexico, 
there  has  been  a  studied  purpose  to  omit  Huerta's  bonds  from 
consideration.  Carranza's  Government  consistently  took  the  posi- 
tion of  not  recognizing  the  validity  and  legality  of  Huerta's  loan 
and  considering  it  as  no  binding  obligation  of  the  Mexican  Gov- 
ernment, though  Carranza  never  showed  the  slightest  intention 
to  repudiate  or  deny  any  of  the  other  external  debts  of  Mexico. 

The  responsibility  of  the  Mexico  of  today  for  the  acts  of  all 
the  administrations  since  the  fall  of  Diaz,  except  that  of  Huerta's, 
is  clear.  As  above  indicated,  however,  there  is  a  fair  possibility 
that  the  Mexican  Government  may  be  able  successfully  to  deny 
responsibility  for  the  acts  of  Huerta's  revolution  and  administra- 
tion. 


V 


CHAPTER  II. 

DIPLOMATIC  INTERPOSITION. 

A. 

DENIAL  OF  JUSTICE  AS  A  GROUND  FOR  DIPLOAIATIC 
INTERPOSITION. 

Diplomatic  interposition  by  the  home  government  may  be 
either  in  protection  of  the  rights  of  the  State  itself,  with  which 
form  of  interposition  we  are  not  here  particularly  concerned,  ex- 
cept as  it  affects  the  presentation  of  claims  by  individuals  or  in 
protection  of  individuals  and  their  international  rights  as  indi- 
viduals in  a  foreign  land.  This  latter  variety  of  interposition  is 
always  based  on  a  denial  of  justice  tO'  the  individual.^  The  term 
"justice"  is  best  measured  by  a  comparison  of  the  treatment  ac- 
corded nationals  with  that  accorded  foreigners,  except  in  those 
situations  where  the  treatment  of  nationals  does  not  reach  the 
standard  of  the  generally  recognized  "rights  of  man"-  which 
are  internationally  binding  on  all  states — on  the  enlightened 
ones  by  common  consent,  and  on  the  less-enlightened  states  by 
the  force,  moral  and  physical,  of  the  stronger  and  more  enlight- 
ened.'^ 


1  See  Mr.  Jefferson,  Sec.  of  State,  to  Mr.  King,  Dec.  7,  1793,  5  MS.  Dom. 
Let.  388  and  Mr.  Jefferson,  Sec.  of  State,  to  the  At.  Gen.,  Mar.  13,  1793,  5  MS. 
Dom.  Let.  70;  Mr.  Fish,  Sec.  of  St.Tte,  to  Mr.  Poster,  min.  to  Mexico,  No.  21, 
Aug.  15,  1873,  MS.  Inst.  Mex.  XIX,  18.  citing  Calvo,  Droit  Int.  II,  397;  Brad- 
ford, At.  Gen.,  1794,  1  Op.  53.  See  to  the  same  effect.  Black,  At.  Gen.  1859, 
9  Op.  374;  Mr.  Evarts,  Sec.  of  State,  to  Mr.  Langston,  min.  to  Hayti,  No.  23, 
April  12,  1878,  MS.  Inst.  Hayti,  II,  136;  same  to  same.  No.  50,  Dec.  23.  1878, 
id.  160;  Mr.  Davis,  Act.  Sec.  of  State,  to  Mr.  Langston,  No.  187,  Aug.  27, 
1882,  id.  299;  Mr.  Evarts,  Sec.  of  State,  to  Mr.  Fairchild.  min.  to  Spain,  Jan! 
17,  1881,  MS.   Inst.   Spain,   XVIII,  .591;  VI,   Moore's   Int.   Law   Dig.,   §986. 

2  Fiore  Sections  67,  68,  69,  gives  a  not  entirely  inclusive  list.  See  also 
Chapter   I,   part  A. 

3  In   connection   with   this    subject   see   Chapter    I   A. 


28 

B. 

CONDITIONS    PREREQUISITE    TO    DIPLOMATIC    IN- 
TERPOSITION. 

I. 

Nature  of  the  Claim  and  Status  of  the  Claimant  as  Af- 
fecting THE  Right  to  Interposition. 

Citizenship  is  an  absolute  prerequisite  to  diplomatic  interposi- 
tion. A  nation  will  not.  nor  may  it,  interpose  in  behalf  of  a  person 
not  its  own  citizen.^  It  is  solely  within  the  discretion  of  the 
claimant's  government  to  decide  whether  or  not  the  claimant  is  a 
citizen,  but  claims  commissions,  notably  the  Spanish  Treaty  Claims 
Commission,  have  often  admitted  evidence  pro  and  con  to  deter- 
mine the  citizenship  of  the  claimant.  Where  unnaturalized  Cubans 
were  serving'  in  the  United  States  Army  they  were  held  not  to  be 
entitled  to  diplomatic  aid  in  the  presentation  of  claims  against 
Spain  arising  from  the  Cuban  laws.-  It  has  been  generally  held 
that  citizenship  of  the  wife  follows  that  of  her  husband,^  but  the 
United  States  might  well  insist  on  a  change  in  this  rule  in  view 
of  the  recent  amendment  of  the  Constitution  admitting  women 
to  suffrage.  Injuries  to  seamen  and  soldiers  by  mobs,  in  riots 
and  at  the  hands  of  insurrectionists,  present  cases,  under  certain 
circumstances,  where  recovery  may  be  had  as  if  the  injured  parties 
had  been  civilians.'^  But  the  general  rule  is  that  applied  by  the 
Spanish  Treaty  Claims  Commission : — that  members  of  military 
forces  injured  in  the  line  of  their  duty  cannot  make  claim  against 
a  foreign  government.-^  A  declaration  of  intention  to  become  a 
citizen  is  not  sufficient.''  Naturalization  is  never  retroactive  in 
its  effect  and  an  injury  occasioned  before  naturalization  will  not 
be  made  the  basis  of  diplomatic  representation." 

International  claims  are  not  assignable  and  no  diplomatic  as- 


1  204  MS.  Dom.  Let.  532,  6  Moore's  Digest  631. 

2  230  MS.   Dom.   Let.  378,  6  Moore's  Digest  631. 

3  Bodenmuller  v.  U.   S.,  1889,  39   Fed.   Rep.  437;  6  Moore's  Digest  630. 

4  MS.    Inst.   Cbile  XVII.   416.    and    For.    Rel.    1901,    App.   362. 

.5  McCann  v.  V.   S.,  30  Spanish   T.   C.   Commission.   6  Moore's   Dig.  632. 

6  153    MS.    Dom.    Let.    194.    195;    Sen.    Doe.    287,    57th    Cong.    First    Sess. ; 
For.  Rel.  1899,  440  et  seq. ;  For.  Rel.  1900,  715-773;  6  Moore's  Dig.  §980. 

7  6  Moore's  Dig.   §981,   and   precedents  cited. 


29 

sistance  will  be  given  the  assignee  of  even  a  completely  just  claim.^ 
Nor  will  a  claim  derived  from  partnership  associations  be  diplo- 
matically aided.^  However,  intervention  in  behalf  of  a  partner- 
ship is  proper  when  its  partnership  interests  have  suffered  injury. 
It  is  well  settled  law  that  "a  g-overnment  may  intervene  in 
behalf  of  a  company  incorporated  under  its  laws  or  under  the 
laws  of  a  constituent  state  or  province."!*^  Since  the  famous 
Delagoa  Bay  case^^  intervention  in  behalf  of  national  (American) 
stockholders  in  a  foreign  (Mexican)  company  has  been  consid- 
ered in  accord  with  good  diplomatic  practice,  where  the  interna- 
tional rights  of  the  stockholders  have  actually  been  abridged.  In 
the  later  case  of  "El  Triunfo  Company, "^^  the  Salvadorean  gov- 
ernment contended  "that  the  case  as  one  affecting  a  Salvadorean 
corporation  was  exclusively  for  the  Salvadorean  courts,"  but  the 
United  States  Government  took  the  ground  that  the  American 
citizens  who  were  the  substantial  owners  of  the  enterprise  were 
injured  and  denied  justice  by  the  Salvadorean  government,  and 
having  no  other  recourse  should  be  protected  by  their  home  gov- 
ernment. A  majority  of  the  arbitrators  appointed  under  a  pro- 
tocol concluded  at  Washington,  December  19,  1901.  concurred  in 
an  award  of  damages,  saying  in  their  opinion,  "We  have  not 
discussed  the  question  of  the  right  of  the  United  States  under 
International  Law  to  make  reclamation  to  the:-^e  shareholders  in 
El  Triunfo  Company,  a  domestic  corporation  of  Salvador,  for  the 
reason  that  the  question  of  such  right  is  fully  settled  by  the  con- 
clusions reached  in  the  frequently  cited  and  well  understood 
Delagoa  Bay  Railway  Arbitration. "^^ 


8  6  Moore's   Dig.    §082. 

9  6   Moore's   Dig.    §983. 

10  6  Moore's  Dig.  §984:  see  also.  Borcliarfl,  Dip.  Prot.  Cit.  Abroad,  §279 
et  seq. 

11  Moore  Int.  Arbitra.  II.  18fi5-lS99,  For.  Rel.  (1902)  S48-S52  Moore's  Dig. 
vol.   6,   pp.   647-649. 

12  Moore's  Digest,  Vol.  6,   pp.  649-651. 

13  Moore's  Dig.  Vol.  6,  p.  651.  At  the  end  of  the  discussion  on  this  case, 
Moore  has  the  following  note: 

"At  page  846  Judge  Penfleld.  Solicitor  of  the  Department  of  State,  in  a 
report  to  Mr.  Hay.  Secretary  of  State,  says:  'While  the  Department  does  not 
dispute  the  contention  that  intervention  by  the  Government  of  the  United 
States  vrould  not  tie  in  entire  accord  with  certain  dicta  expressed  in  the  case 
of  the  Antioguia  in  respect  of  intervention  in  behalf  of  American  stockliolders 
ill  n  foreign  corporation,  it  is  consistent  with  the  actual  grounds  of  that  deci- 
sion. But  if  all  the  reasons  stated  in  that  case  against  the  right  of  inter- 
vention were  to  be  accepted,  even  if  intervention  had  been  refused  solely  on 
tlie  academic  reasons  given,  the  decision  of  this  ease  would  be  controlled  by 
the  later  decision  of  the  Department  in  the  case  of  the  Delagoa  Bay  Railway.'  " 


30 

Other  societies  and  unincorporated  bodies  are  generally  not 
proper  claimants  for  injuries  to  persons  or  on  lives  lost.^^ 


When  Local  Remedies  Must  First  Be  Exhausted. 

Some  authorities  insist  that  in  no  case  is  there  an  absolute 
obligation  on  -the  claimant  to  first  exhaust  his  local  remedies.^ 
The  State  itself,  and  not  the  individual  alone,  is  injured  by  an 
m justice  to  its  citizen  abroad  and  can  of  its  own  right  diplo- 
matically interpose — this  is  the  theory  advanced  by  these  author- 
ities and  it  is  probably  fundamentally  sound.  However,  the  rule 
is  generallv  accented  that  recourse  must  first  be  had  to  the  local 
remedy  before  diplomatic  assistance  can  be  rightly  invoked.^ 

It  has  been  the  established  practice  of  the  United  States  to 
adhere  firmly  to  this  general  rule  in  the  case  of  claims  by  for- 
eigners against  the  United  States,-^  and  it  has  also  been  followed 
by  this  country  in  the  case  of  claims  of  citizens  of  the  United 
States  against  foreign  governments.'* 

Despite  the  general  acceptance  of  the  rule  above,  states  have 
frequently  resorted  to  diplomatic  interposition  in  behalf  of  their 
citizens  abroad  under  an  exception  to  this  rule  that  local  remedies 


14     See  article,  Vol.   I,  A.  J.   I.   L.,   p.  S. 

1  See,  "luterniitional  Responsiliility  of  States"  by  Julius  Goebel,  Jr.,  in 
VIII   A.   J.    I.    L.,   p.   802. 

2  The  principle  that  local  redress  must  first  be  sought  has  been  so  fre- 
quently reiterated  that  no  attempt  will  here  be  made  to  collect  a  large  num- 
ber of  citations.     Many  may  be  found  in  6  Moore's  Dig.   §987. 

.3  Randolph,  At.  Gen.,  1792,  1  Op.  25;  Lincoln,  At.  Gen.,  1803,  5  Op.  (App.) 
692;  Ackerman,  At.  Gen.,  1871,  13  Op.  547;  Butler,  At.  Gen.  1837,  3  Op.  254; 
Mr.  Buchanan,  Sec.  of  State;  Dec.  26,  1846.  MS.  Notes  to  Gt.  Britain,  VII, 
149,  6  Moore's  Dig.  659;  Mr.  Seward,  Sec.  of  State,  to  Lord  Lyons,  .Ian.  12, 
1863,  MS.  Notes  to  Gr.  Brit.  IX,  402;  Mr.  Olney,  Sec.  of  State,  to  the  Presi- 
dent, Feb.  5,  1896,  For.  Rel.  1895,  I,  2.51,  259;  H.  Doc.  225,  54  Cong.  1  Sess. ; 
VI,   Moore's   Dig.   §987. 

4  Ackerman,  Atty.  Gen.,  1872,  13  Op.  554;  Mr.  Buchanan,  Sec.  of  State, 
to  Mr.  Larrabee,  Mar.  9,  1846,  35  MS.  Dom.  Let.  426;  Mr.  Fish,  Sec.  of  State, 
to  Mr.  Ruger,  Oct.  21,  1869,  82  MS.  Dom.  Let.  224;  Mr.  Davis,  Act.  Sec.  of 
State,  to  Mr.  Taylor,  Oct.  20,  1871.  91  MS.  Dom.  Let.  154;  Mr.  Fish,  Sec.  of 
State,  to  Mr.  Becker,  May  3,  1871,  89  MS.  Dom.  Let.  250;  Mr.  Olney,  Sec. 
of  State,  to  Mr.  Dessaw,  Nov.  19,  1896,  214  MS.  Dom.  Let.  66;  VI,  Moore's 
Dig.    §987. 


31 

need  not  first  be  sought  when  .there  is  little  or  no  possibility  of 
securing  redress/'  This  exception  has  been  tersely  stated  by  Mr. 
Fish,  the  United  States  Secretary  of  State,^  as  "a  claimant  in  a 
foreign  State  is  not  required  to  exhaust  justice  in  such  State 
when  there  is  no  justice  to  exhaust." 

In  the  case  of  Messrs.  Ulrich  and  Langstroth,  who  made  claim 
against  the  Mexican  Government  for  losses  inflicted,  and  forced 
loans  imposed  by  insurgents  at  Monterey,  the  United  States  Gov- 
ernment interposed  in  behalf  of  the  claimants  on  the  theory  that 
they  had  been  denied  an  opportunity  of  proving  their  case." 

The  good  sense  of  this  exception  to  the  rule  above  is  scarcely 
to  be  doubted.  There  are  certainly  situations  where  the  foreigner 
can  only  be  protected  by  the  immediate  interposition  of  his  honie 
Government.  But  this  right  of  interposition  should  be  used 
with  great  caution.  It  is  a  dangerous  world  policy  that  would 
permit  a  nation,  except  in  the  most  evidently  necessary  situations, 
to  arrogate  to  itself  the  right  to  judge  the  standards  oi  justice 
applied  by  a  sister  nation.  International  comity  demands,  in  all 
cases  where  there  is  not  some  perfectly  obvious  and  undeniably 
serious  flaw  in  the  local  machinery  of  justice,  that  the  alien  be 
forced  by  his  home  Government  to  seek  local  redress  before 
interposition  will  be  undertaken  in  his  behalf.  Secretar}^  of  State 
Seward  of  the  United  States''^  officially  took  notice  of  the  dangers 
of  permitting  an  arbitrary  interposition  under  the  above  excep- 
tion to  the  rule  respecting  local  redress,  as  follows : 

"We  are  unfortunately  too  familiar  with  complaints  of  the 
delay  and  inefficiency  of  the  courts  in  South  American  republics. 
We  must,  however,  continue  to  repose  confidence  in  their  inde- 
pendence and  integrity,  or  we  must  take  the  broad  ground  that 
these  states  are  like  those  of  oriental  semi-civilized  countries — 
outside  the  pale  within  which  the  law  of  nations,  as  generally 
accepted  by  Christendom,  is  understood  to  govern.     The  people 


5  See  Mr.  F.  W.  Seward,  Act.  Sec.  of  State,  to  Mr.  Gibbs,  min.  to  Peru, 
No.  133,  Feb.  10,  1879,  MS.  Inst.  Peru,  XVI,  381;  Lord  Palmerston,  in  the 
House  of  Commons,  June  2.5,  1850,  on  the  case  of  Don  Pacitico,  Hansard, 
I'arl.   Debates,  CXII,  382-387. 

6  MS.    Inst.    Venezuela   II,   228. 

7  6  Moore's  Dig.  678-80. 

8  Instruction  to  Mr.  Burton.  Minister  to  Colombia,  on  April  27,  1SG6,  No. 
r^~  DipltuiKitic  Correspondence  1866,  III,  522-23. 


32 

who  go  to  these  regions  and  encounter  great  risks  in  the  hope 
of  gi-eat  rewards,  must  be  regarded  as  taknig  all  the  circumstances 
into  consideration  and  cannot  with  reason  ask  their  government 
to  complain  that  they  stand  on  a  common  footing  with  native 
subjects  in  respect  to  the  alleged  wants  of  an  able,  prompt,  and 
conscientious  judiciary.  We  cannot  undertake  to  supervise  the 
arrangements  of  the  whole  world  for  litigation,  because  x^merican 
citizens  voluntarily  expose  themselves  to  be  concerned  in  their 
deficiencies." 

Where  a  government  has  superseded  local  remedies  with 
others,  the  alien  is.  of  course,  not  obliged  to  resort  to  local  rem- 
edies first,^  and  where  the  local  remedy  is  in  the  nature  of  an 
appeal  to  a  conmiission  of  nationals,  diplomatic  action  is  not  pre- 
cluded by  the  exi.-tence  of  such  a  commission.^^ 

As  a  corollar}^  of  the  generally  recognized  duty  to  seek  local 
redress  first  when  possible,  an  unjust  judgment  is  not  interna- 
tionally binding.ii  "The  defense  of  res  adjudicata  does  not  apply 
to  cases  where  the  judgment  set  up  is  in  violation  of  international 
law."i-  The  United  States  refused  to  recognize  the  validity  of 
judgments  of  the  British  Prize  Courts  which  violated  settled 
principles  of  international  law.^^  A  judgment  should  not,  how- 
ever, be  questioned  on  purely  technical  grounds.!'^ 

The  following  excerpt  from  an  article  by  Elihu  Root,^^  enti- 
tled "The  Basis  of  Protection  to  Citizens  residing  Abroad,"  is  a 
valuable  commentary  on  this  subject: 

"*  *  *  The  rule  of  obligation  is  perfectly  distinct  and 
settled.    Each  country  is  bound  to  give  to  the  nationals  of  another 


9  See  citations  in  6  Moore's  Dig.   §989. 

10  6  Moore's   Dig.  §990. 

11  See  discussion   of  judicial  acts  in   Chapter   IV,   part  C. 

12  Wharton's  Int.  Law  Dig.  II,  671;  See  Wheaton,  Lawrence's  Ed.  of 
1863,  pp.  673-4,  citing  Grotius  de  Jur.  Kel.  Ac.  Pac,  Lib.  Ill,  cap.  2,  Sec.  5, 
No.  1;  See  also,  Bynkershock,  Quaest.  Jur.  Pub.  Lib.  1,  cap.  24,  and  Vattel 
Droit  des  Gens,  Liv.  11,  Ch.  IS,  Sec.  350;  See  also,  Mr.  Fish,  Sec.  of  State, 
to  Mr.  Kelson,  min.  to  Mexico,  Jan.  2,  1873,  MS.  Inst.  Mex.  XVIII,  357;  Mr. 
Evarts,  Sec.  of  State,  to  Mr.  Foster,  min.  to  Mexico,  April  19,  1879,  MS. 
Inst.  Mex.,   XIX,  570;  VI,   Moore's  Dig.   §991. 

13  See  "British  Prize  Court  Decisions  in  the  Chicago  Packing  House  Case," 
by  Chandler  P.  Anderson,  XI,   A.  J.   I.   L.  269. 

14  Report  of  Mr.  Olney,  Sec.  of  State,  to  the  President,  Feb.  5,  1896,  in 
relation  to  the  case  of  John  L.  W'aller,  H.  Doc.  225,  54  Cong.  1  sess.  7;  For. 
Rel.   1895,   I,   257-258. 

15  Vol.    IV,   A.    J.    I.    L.    521. 


32 

country  in  its  territory  the  benefit  of  the  same  laws,  the  same 
administration,  the  same  protection,  and  the  same  redress  for 
injury  which  it  gives  to  its  own  citizens,  and  neither  more  nor 
less ;  provided  the  protection  which  the  country  gives  to  its  own 
citizens  conforms  to  the  established  standard  of  civilization. 

"There  is  a  standard  of  justice,  very  simple,  very  fundamental, 
and  of  such  general  acceptance  by  all  civilized  countries  as  to  form 
a  part  of  .the  international  law  of  the  world.  The  condition  upon 
which  any  country  is  entitled  to  measure  the  justice  due  from 
it  to  an  alien  by  the  justice  which  it  accords  to  its  own  citizens 
is  that  its  system  of  law  and  administration  shall  conform  to  this 
general  standard.  If  any  country's  system  of  law  and  adminis- 
tration does  not  conform  to  that  standard,  although  the  people  of 
the  country  may  be  content  or  compelled  to-  live  under  it,  no  other 
country  can  be  compelled  to  accept  it  as  furnishing  a  satisfactory 
measure  of  treatment  to  its  citizens.  In  the  famous  Don  Pacifico 
case.  Lord  Palmerston  said,  in  the  House  of  Commons : 

'If  our  subjects  a1)road  have  complaints  against  in- 
dividuals, or  against  the  government  of  a  foreign  country, 
if  the  courts  of  law  of  that  country  can  afford  them 
redress,  then,  no  doubt,  to  those  courts  of  justice  the 
British  subject  ought  in  the  first  instance  to  apply;  and 
it  is  only  on  a  denial  of  justice,  or  upon  decisions  mani- 
festly unjust,  that  the  British  Government  should  be 
called  upon  to  interfere.  But  there  may  be  cases  in 
which  no  confidence  can  be  placed  in  the  tribunals,  those 
tribunals  being,  from  their  composition  and  nature,  not 
of  a  character  to  inspire  any  hope  of  obtaining  justice 
from  them.  It  has  been  said :  "We  do  not  apply  this 
rule  to  countries  whose  governments  are  arbitrary  or 
despotic,  because  there  the  tribunals  are  under  the  con- 
trol of  the  government,  and  justice  can  not  be  had;  and, 
moreover,  it  is  not  meant  to  be  applied  to  nominally 
constitutional  governments,  where  the  tribunals  are  cor- 
rupt." 

T  say,  then,  that  our  doctrine  is,  that,  in  the  first 
instance,  redress  should  be  sought  from  the  law  courts  of 
the  country ;  but  that  in  cases  where  redress  can  not  be 
so  had — and  those  cases  are  many — to  confine  a  British 
subject  to  that  remedy  only,  would  be  to  deprive  him  of 
the  protection  wdiich  he  is  entitled  to  receive.     *     *     * 

'We  shall  be  told,  perhaps,  as  we  ha\'e  already  been 


34 

told,  that  if  the  people  of  the  country  are  liable  to  have 
heavy  stones  placed  upon  their  breasts,  and  police  officers 
to  dance  upon  them ;  if  they  are  liable  to  have  their  heads 
tied  to  their  knees,  and  to  be  left  for  hours  in  that  state ; 
or  to  be  swung  like  a  pendulum,  and  to  be  bastinadoed  as 
they  swing,  foreigners  have  no  right  to  be  better  treated 
than  the  natives,  and  have  no  business  to  complain  if  the 
same  things  are  practiced  upon  them.  We  may  be  told 
this,  but  that  is  not  my  opinion,  nor  do  I  believe  it  is  the 
opinion  of  any  reasonable  man.'  ^^ 

Nations  to  which  such  observations  apply  must  be  content  to 
stand  in  an  intermediate  position  between  those  incapable  of 
maintaining  order,  and  those  which  conform  fully  to  the  interna- 
tional standard.  With  this  understanding  there  are  no  exceptions 
to  the  rule  and  no  variations  from  it. 

:f:  :{:  ^  :{:  :J:  :ic  :(; 

"The  most  frequent  occasions  of  appeal  by  citizens  for  pro- 
tection in  other  countries  arise  upon  the  assertion  that  justice  has 
been  denied  them  in  the  courts,  and  this  appears,  unfortunately, 
to  be  a  frequent  occurrence.     *     *     * 

"A  large  proportion  of  such  complaints  are,  however,  without 
just  foundation.  Citizens  abroad  are  too  apt  to  complain  that 
justice  has  been  denied  them  whenever  they  are  beaten  in  a  litiga- 
tion, forgetting  that,  as  a  rule,  they  would  complain  just  the 
same  if  they  were  beaten  in  a  litigation  in  the  courts  of  their  own 
country.  When  a  man  goes  into  a  foreign  country  to  reside  or  to 
trade  he  submits  himself,  his  rights,  and  interests  to  the  jurisdic- 
tion of  the  courts  of  that  country.  He  will  naturally  be  at  a 
disadvantage  in  litigation  against  citizens  of  the  country.  He  is 
less  familiar  than  they  with  the  laws,  the  ways  of  doing  business, 
the  habits  of  thought  and  action,  the  method  of  procedure,  the 
local  customs  and  prejudices,  and  often  with  the  language  in 
which  the  business  is  done  and  the  proceedings  carried  on.  It  is 
not  the  duty  of  a  foreign  country  in  which  such  a  litigant  finds 
himself  to  make  up  to  him  for  these  disadvantages  under  which 
he  labors.  They  are  disadvantages  inseparable  from  his  prose- 
cuting his  business  in  a  strange  land.  A  large  part  of  the  dissatis- 
faction   which    aliens    feel    and    express    regarding"    their    treat- 


16    See  Hansard,  Pail.  Debates  CXII,  3S2-7. 


35 

ment  by  foreign  tribunals  results  from  these  causes,  which  furnish 
no  just  ground  for  international  complaint.  It  is  very  desirable 
that  people  who  go  into  other  countries  shall  realize  that  they 
are  not  entitled  to  have  the  laws  and  police  regulations  and 
methods  of  judicial  procedure  and  customs  of  business  made  over 
to  suit  them,  or  to  have  any  other  or  different  treatment  than 
that  which  is  accorded  to  the  citizens  of  the  country  into  which 
they  have  gone ;  so  long  as  the  government  of  that  country  main- 
tains, according  to  its  own  ideas  and  for  the  benefit  of  its  own 
citizens,  a  system  of  law  and  administration  which  does  not  violate 
the  common  standard  of  justice  that  is  a  part  of  international  law ; 
and  so  long  as,  in  conformity  with  that  standard,  the  same  rights, 
the  same  protection,  and  the  same  means  of  redress  for  wrong  are 
given  to  them  as  are  given  to  the  citizens  of  the  country  where 
they  are.  On  the  other  hand,  every  one  who  goes  into  a  foreign 
country  is  bound  to  obey  its  laws,  and  if  he  disobeys  them  he  is 
not  entitled  to  be  protected  against  punishment  under  those  laws. 
It  follows,  also,  that  one  in  a  foreign  country  must  submit  to  the 
inconvenience  of  proceedings  that  may  be  brought  in  accordance 
with  law  upon  any  bona  fide  charge  that  an  offense  has  been  com- 
mitted, even  though  the  charge  may  not  be  sustained.  Neverthe- 
less, no  violation  of  law  can  deprive  a  citizen  in  a  foreign  country 
of  the  right  to  protection  from  the  government  of  his  own  coun- 
try. There  can  be  no  crime  which  leaves  a  man  without  legal 
rights.  One  is  always  entitled  to  insist  that  he  shall  not  be  pun- 
ished except  in  accordance  with  law,  or  without  such  a  hearing 
as  the  universally  accepted  principles  of  justice  demand.  If  that 
right  be  denied  to  the  most  desperate  criminal  in  a  foreign  country, 
his  own  government  can  and  ought  to  protect  him  against  the 
wrong." 

Unju.^t  discriminations  in  the  execution  of  local  justice  will 
form  a  basis  for  national  interposition.^'''  Mr.  Bayard,  United 
States  Secretary  of  State,  in  a  letter  to  Mr.  Copeland,  Feb.  23, 
1886,^'^  declining  to  present  the  claim  of  the  petitioner  for  the 


17  Mr.  Fish,  Sec.  of  State,  to  Mr.  White,  Jan.  7,  1874;  MS.  Inst.  Arg. 
Rep.  XVI,  57.  Opinion  of  Dr.  Francis  Wharton,  Solicitor  of  the  Dept.  of 
State,  in  the  case  of  William  A.  Davis  v.  Great  Britain,  1SS5,  cited  in  Mr. 
Day,  Act.  Sec.  of  State,  to  Messrs.  Lauterbaeh,  Ditteuhoefer  &  Limburger, 
April   6,  1898,  227  MS.   Dom.   Let.  228. 

IS    159  MS.   Dom.   Let.   138. 


36 

muirder  of  his  father  in  Mexico,  said :  "By  the  principles  of 
international  law,  accepted  by  both  Mexico  and  ourselves,  we  can 
no  more  pemiit  ourselves  to  seek  redress  for  injuries  inflicted  by 
private  individuals  in  Mexico  on  one  of  our  citizens,  than  we 
could  permit  Mexico^  to  intervene  to  seek  redress  for  injuries  in- 
flicted on  Mexicans  by  private  individuals  in  the  United  States. 
The  rule  is  that,  where  the  judiciary  is  recognized  in  a  country 
co-ordinate  with  the  executive,  having  connmitted  to  it  all  suits 
for  redress  of  injuries  inflicted  on  aliens  as  well  as  on  citizens, 
then  the  judiciary  and  not  the  executive  must  be  appealed  to  for 
redress.  There  are,  it  is  true,  two  exceptions  recognized  to^  this 
rule :  First,  when  there  is  undue  discrimination  against  the  party 
injured  on  account  of  his  nationality;  secondly,  where  the  local 
tribunals  are  appealed  to,  but  justice  was  denied  in  violation  of 
those  common  principles  of  equity  which  are  of  the  law  of 
nations." 

Under  a  decree  dated  October  i,  1918,  President  Carranza 
established  a  Claims  Commission,  composed  of  nationals,  for  the 
purpose,  as  stated  in  Article  II,  "of  passing  upon  claims  for  in- 
juries to  individuals  or  to  property,  occasioned  by  the  revolution- 
ary movements  which  took  place  in  the  Republic  during  the  years 
1910-1917."  The  time  within  which  claims  must  be  presented  to 
the  Commission,  under  the  tenns  of  the  decree  establishing  it,  has 
recently  been  extended  a  year.  A  discussion  of  this  Commission 
and  its  work  is  not  particularly  valuable.  As  mentioned  some- 
where above,  diplomatic  action  is  not  precluded  by  the  existence 
of  the  unused  remedy  of  an  appeal  to  a  local  commission  of  na- 
tionals,^^ and  arrangements  will  probably  have  tO'  be  made  between 
Mexico  and  the  countries  whose  citizens  have  claims  against  her, 
whereby  an  appeal  to  Carranza's  Commission  will  not  be  a  pre- 
requisite to  the  presentation  of  a  claim  to  the  Commission  which 
will  eventually  adjudicate  these  claims  against  Mexico.  Indeed, 
it  is  very  probable  that  in  the  ultimate  protocols  or  agreements 
certain  classes  of  claims  will  be  enumerated  in  regard  to  which 
no  local  remedies  whatsoever  will  need  to  be  exhausted. 


19     6  Moore's  Digest,   §990. 


37 


CHAPTER  III. 

THE     PRESENTATION     AND     ADJUDICATION      OF 
INTERNATIONAL   CLAIMS. 

Internatioi-ial  claims  may,  of  course,  be  presented  to  the  local 
government  for  relief.  In  the  event  of  an  actual  or  anticipated 
defect  in  local  justice,  or  in  case  the  injury  complained  of  is  an 
injury  at  the  same  time  to  the  rights  of  the  claimant's  government, 
claims  may  be  presented  to  the  home  State  Department,  and,  if 
adjudged  by  it  to  be  w^orthy  and  valid,  should  be  presented  diplo- 
matically to  the  foreign  government.  "In  a  *  *  *  communi- 
cation, the  Department  of  State  explained  that  claims  against  the 
Government  could  be  presented  only  in  one  of  two  ways :  ( i ) 
Either  by  the  claimant's  availing  himself  directly  of  such  judicial 
or  administrative  remedy  as  the  domestic  law  might  prescribe ; 
or  (2)  in  the  absence  of  such  remedy,  if  the  claimant  was  an 
alien,  by  his  government  'formally  presenting  the  claim  as  an 
international  demand  to  be  adjusted  through  the  diplomatic  chan- 
nel.' "1 

In  order  to  secure  the  approval  of  a  Department  of  State  the 
claim  must  present  merely  prima  facie  evidence  of  good  cause, 
such  as  would  ordinarily,  in  a  private  law  action,  authorize  an 
equity  court  to  issue  ex  parte  process.  An  exhaustive  examina- 
tion of  the  merits  of  a  claim  will  not  generally  be  made  until  a 
contest  arises  upon  presentation  of  the  claim  to  the  other  govern- 
ment.    A  prima  facie  case  must  be  made  out,  however.- 

We  are  not  here  concerned  with  claims  which  are  presented 
to  the  local  government  for  settlement  by  the  individual  foreigner. 
We  need  discuss  in  this  section,  consequently,  the  procedural 
aspects  of  the  settlement  of  such  claims  only,  as  have  already  been 


1  Moore's  Digest,  Vol.  VI,  p.  608,  quoting  Mr.  John  Davis,  Act.  Sec.  of 
State,  to  Baron  de  Fava,  July  9,  1884,  MS.  Notes  to  Italy,  VIII,  92.  See  also 
Mr.  Olney,  Sec.  of  State,  to  Mr.  Smythe,  min.  to  Hayti,  No.  136,  March  20, 
1896,  MS.  Inst.  Hayti,  III,  479.  See  also,  Mr.  Gresham,  Sec.  of  State,  to  Mr. 
Smythe,  tel.,  March  21,  1895,  MS.  Inst.  Hayti  III,  439. 

2  Mr.  Bayard,  Sec.  of  State,  to  Mr.  Denby,  Feb.  5,  1886,  MS.  lust.  China, 
IV,  118.  See  also,  Mr.  Bayard,  Sec.  of  State,  to  Mr.  Cox,  min.  to  Turkey,  No. 
60.'  Jan.   9,   1886,   MS.    Inst.   Turkey,   IV,   366. 


38 

placed  in  the  hands  of  the  home  government  of  the  foreigner 
claimant  or  of  such  claims  as  are  the  subject  of  arbitration  or 
settlement  between  nations. 

In  recent  years  many  disputes  between  nations  have  been 
amicably  settled  by  resort  to  the  mechanics  of  The  Hague  court. 
Others,  as  in  the  case  of  the  Aslop  claims,  where  the  United  States 
and  Chile  appointed  Edward  VII  of  England  as  mediator,  have 
been  settled  by  the  appointment  under  a  protocol  of  an  Amicable 
Compositeur.  Some  disputes  between  the  Latin-American  States 
have  been  settled  by  the  Pan-American  Court  of  Arbitration.  It 
is  quite  possible  that  a  body  under  the  League  of  Nations  may 
begin  to  function  in  the  near  future  as  an  arbitrator  oi  interna- 
tional disputes,  but  it  can  hardly  be  expected  that  a  smooth  arbi- 
tration system  will  be  developed  under  the  League  in  time  to 
adjudicate  the  claims  against  Mexico.  Furthermore,  neither  the 
LTnited  States  nor  Mexico  is  represented  in  the  League  of  NatioiT^ 
at  the  time  of  writing,  and  it  is  hardly  possible  that  claims  of 
L'^nited  States  citizens  against  Mexico  will  be  submitted  for  set- 
tlement bv  these  two  countries  to  a  body  not  as  yet  supported  by 
them.  It  is  submitted  that  the  most  satisfactory  and  probably 
the  eventual  method  of  settling  the  claims  against  Mexico  will  be 
found  in  the  creation  of  a  mixed  claims  commission. 

Mexico  has  several  times  experienced  a  Alixed  Claims  Com- 
mission for  the  settlement  of  claims  against  her.  A  "Convention 
for  the  Adjustment  of  Claims  of  Citizens  of  the  United  States 
Against  Mexico"  was  concluded  on  April  ii,  1839,  and  proclaimed 
April  8,  1840.  Under  this  Convention  the  claims  were  referred 
to  a  Board  of  four  commissioners,  two  selected  by  each  country 
and  the  King  of  Prussia  was  designated  to  appoint  an  arbitrator 
and  umpire.  A  "Convention  for  the  Settlement  of  Claims,"  signed 
by  the  United  States  and  Mexico  July  4,  1868,  and  proclaimed 
February  i,  1869,  provided  for  a  Board  of  two  Commissioners 
with  an  umpire  to  settle  the  disputed  questions.  On  March  2, 
1897,  the  United  States  and  Mexico  again  signed  a  Claims  Conven- 
tion called  the  "Protocol  Concerning  Claims  of  Oberlander  and 
Messenger."  This  was  no  Mixed  Claims  Commission,  however, 
as  it  provided  merely  for  the  selection  of  an  arbitrator.  On  Mr?y 
22,  1902,  there  was  signed  by  the  two  countries  the  famous  "Pro- 


39 

tocol  for  the  Adjustment  of  Certain  Contentions  Arising  under 
what  is  known  as  the  'The  Convention  of  the  CaHfornias.'  "  This 
protocol  provided  for  four  cornniissioners,  two  to  be  selected  by 
each  country,  and  none  to  be  nationals  of  the  contending  coim- 
tries,  with  an  umpire  to  be  selected  under  the  rules  of  The  league 
Conference.^ 

A  Convention  between  the  United  States  and  ]\Iexico^  was 
signed  at  Washington  on  March  24,  1908,  and  proclaimed  on 
June  29,  1908.  This  was  one  of  the  Arbitration  Treaties  con- 
tracted by  Root  while  Secretary  of  State.  Article  i  of  this  Treaty 
reads  as  follows : 

"Differences  udiich  may  arise  whether  of  a  legal  nature 
or  relating-  to  the  interpretation  of  the  treaties  existing 
between  the  two  contracting  parties  and  which  it  may 
not  have  been  possible  to  settle  by  diplomacy,  in  case  no 
other  arbitrator  should  have  been  agreed  upon,  shall  be 
referred  to  the  Permanent  Court  of  Arbitration  estab- 
lished at  The  Hague  by  the  Convention  of  the  29th  July. 
1899,  provided  that  they  do  not  affect  the  vital  interest, 
independence,  or  the  honor  of  either  of  the  contracting 
parties  and  do  not  prejudice  the  interests  of  a  third 
party."  ^ 

The  Convention  of  1908,  quoted  above,  is  still  binding  on 
Mexico  and  the  United  States,  but  its  wording  permits  the  estab- 
lishment of  a  Mixed  Claims  Commission.  Augustus  O.  Bacon, 
U.  S.  Senator  from  Georgia,  pointed  this  out  in  an  Article— 
"The  Senate  Amendments  to  the  Arbitration  Treaties,"  published 
in  the  North  American  Review.^  In  discussing  the  difference  be- 
tween the  two  treaties  negotiated  by  Secretary  of  State  Knox  and 
the  twenty-five  negotiated  by  Root,  he  says  as  follows : 

"In  each  of  the  25  Root  treaties  it  is  agreed  that  the  interna- 


3  These  Conventions  and  Protocols  have  been  published  by  the  Govern- 
ment Printing   Office  at   Washington. 

4  Treaty  Series  No.  500  U.  S.  Government  Printing  Office. 

5  The  Second  and  Fourth  Articles  of  this  (Convention  provide  for  a  method 
of  procedure  and  ratification  respectively.  Section  3  states  that  Article  XXI 
of  the  Treaty  of  Guadalupe  Hidalgo  signed  on  February  2,  1848,  shall  remain 
in  effect.  This  Article  XXI  provides  for  the  peaceful  settlement  of  disputes 
but  is  rather  weak  inasmuch  as  it  permits  either  of  the  two  nations  to  reject 
arbitration  if  it  is  "deemed  by  it  altogether  incompatible  with  the  nature  of 
the  difference,  or  the  circumstances  of  the  case." 

6  Republished  as  Senate  Document  No.  6.54,  62nd  Congress.  Second  Ses- 
sion— quoted   from   page  3. 


40 

tional  differences  shall  be  referred  for  settlement  to  the  Perma- 
nent Court  of  Arbitration  at  The  Hague.  In  the  2  Knox  treaties 
it  is  provided  that  these  international  differences  shall  be  referred 
to  this  court  at  The  Hague  'or  to  some  other  tribunal,'  as  may  be 
decided  by  the  parties  in  each  case.  This  difference  in  the  terms, 
respectively,  of  the  Root  and  Knox  agreements  is  inappreciable, 
and  is  unimportant  in  view  of  the  fact  that  in  case  of  any  differ- 
ence arising  between  the  United  States  and  any  one  of  these  25 
nations  it  would  be  perfectly  competent,  if  desired,  for  the  parties 
to  agree  to  refer  the  same  for  settlement  to  some  other  tribunal 
than  the  Permanent  Court  at  The  Hague." 

A  Mixed  Claims  Commission  is  generally  organized  under  a 
convention  or  protocol  of  the  two  governments  concerned,  such 
a  convention  or  protocol  being  substantially  an  agreement  to  arbi- 
trate claims  of  citizens  of  the  one  State  against  the  other..  Details 
regarding  procedure  vary.  It  is  customary  to  agree  to  the 
appointment  of  two  commissioners  or  arbitrators,  one  by  each  of 
the  executives  of  the  two  nations,  with  a  provision  that  the  two 
executives,  or  the  two  commissioners,  shall  between  them  select 
a  third  commissioner,  usually  a  citizen  of  a  third  nation,  to  act 
as  umpire  and  having  the  decisive  vote  in  case  of  a  disagreement 
between  the  other  two  arbitrators.  In  the  convention  between 
the  United  States  and  Mexico,  signed  July  4,  1868,  it  was  pro- 
vided that  the  two  commissioners  first  sit  on  all  the  claims  and 
that  they  appoint  an  umpire,  merely  for  the  settlement  of  the 
disputed  claims.  In  the  event  of  their  failing  to  agree  on  an 
umpire,  it  was  provided  that  they  each  appoint  a  representa- 
tive, and  that  it  be  decided,  for  each  disputed  claim,  by  lot,  which 
representative  should  sit  as  arbitrator.  The  convention  between 
the  United  States  and  the  Republic  of  Chile,  signed  at  Santiago, 
August  7,  1892,  and  ratified  January  26,  1893,  established,  it  is 
submitted,  a  better  procedure,  inasmuch  as  it  provided  that, 
upon  the  failure  of  the  two  executives  to  select  a  third  commis- 
sioner within  three  months,  said  third  commissioner  would  be 
selected  by  a  third  party — in  this  case,  the  President  of- the  Swiss 
Confederation. 

The  present  claims  controversy  presents  the  situation,  how- 
ever, of  claims  by  more  than  one  government  against  Mexico. 


41 

To  cover  this  situation,  one  of  several  courses  might  be  adopted. 
The  other  claimant  governments  could  under  an  arrangement  with 
the  United  States  and  in  compliance  with  one  interpretation  of 
the  Monroe  Doctrine  turn  over  the  prosecution  of  their  claims 
to  the  United  States  Government.  It  is  doubtful,  however, 
whether  the  United  States  would  consent  to  this  procedure.  A 
second  plan  might  be  the  appointment  of  a  commissioner  by  each 
of  the  claimant  governments  to  sit  with  the  Mexican  Commis- 
sioner and  the  umpire  on  the  respective  claims  presented  by  his 
government.  These  two  plans  seem  to  be  preferable  to  a  pos- 
sible third,  that  of  establishing  separate  commissions  for  the  con- 
sideration of  the  claims  of  each  government,  as  they  would  sim- 
plify the  work  for  the  Mexican  Government. 

To  assure  the  claimants  a  fair  opportunity  to  present  their 
claims  adequately,  it  is  necessary  to  secure  to  them  in  the  protocol 
or  agreement  establishing  the  commission,  the  right  to  examine 
books,  records  and  documents  and  to  take  depositions  in  either 
country.  Without  this  right,  and  without  a  considerable  amount 
of  co-operation  on  the  part  of  both  Governments,  it  would  be 
practically  impossible  in  almost  all  instances  for  the  claimant  to 
properly  prepare  his  case. 

The  Spanish  Treaty  Claims  Commission,  before  which  were 
brought  some  542  claims  based  on  losses  or  injuries  suffered  dur- 
ing the  Cuban  Insurrection  (the  claims  totaling  $642,931,694.51, 
and  covering  almost  every  possible  variety  of  damage),  consumed 
nine  years  "in  the  reception,  examination  and  adjudication  of  these 
claims.""  In  the  words  of  the  final  report  of  the  Commission 
"perhaps  two  years  might  have  been  saved,  if,  at  the  beginning, 
there  had  existed  practical  methods  for  procuring  testimony  in 
Cuba  and  Spain."  The  following  excerpt  from  the  same  report 
will  serve  to  illustrate  the  difficulties  which  should  be  anticipated 
upon  the  organization  of  the  claims  commission : 

"Sources  of  Evidence. 

Soon  after  the  organization  of  the  commission  it  was 

ascertained  that  practically  all  of  the  evidence  on  which 

the  cases  would  be  tried  would  come  from  four  sources, 

namely,  the  records  of  the  State  Department,  the  Spanish 

7    Senate  Document  550,  61st  Congress,  2d  Session. 


42 

archives  in  Madrid,  witnesses  in  Cuba  and  Spain,  and 
v/itnesses  in  the  United  States.  Under  the  organic  act, 
it  was  proA'ided  that  'all  reports,  records,  proceedings, 
and  other  documents  now  on  file  or  of  record  in  the 
Department  of  State  or  in  any  other  department,  or  cer- 
tified copies  thereof,  relating  to  any  claims  prosecuted 
before  said  commission  shall  be  furnished  to  the  com- 
mission upon  its  order.'  An  order  was  thereupon  issued 
for  certified  copies  of  all  such  documents.  The  State 
Department  was  without  funds  for  this  purpose,  and  the 
work  of  securing  these  records  was  delayed  until  an 
appropriation   was   made   therefor  by   Congress. 

Methods  for  Procuring  Testimony. 

The  act  creating  the  commission  empowered  it  to 
appoint  one  or  more  commissioners  to  take  testimony. 
There  was  no  trouble  or  delay  in  this  respect,  so  far  as 
taking  depositions  in  the  United  States  was  concerned, 
but  it  was  soon  apparent  that  there  existed  no  practical 
method  of  taking  depositions  in  foreign  countries.  It 
was  also  apparent  that  a  large  majority  of  the  witnesses 
upon  whom  both  claimants  and  the  Government  must 
depend  resided  either  in  Cuba,  where  the  losses  occurred, 
or  in  Spain,  to  which  the  armies  of  that  Kingdom,  in  Cuba 
during  the  insurrection,  had  returned  at  the  close  of  the 
Spanish-American  war.  The  laws  of  practice  and  pro- 
cedure of  Spain  and  Cuba  were  so  radically  unlike  those 
of  this  country  that  it  was  practically  impossible  to  pro- 
cure testimony  except  by  complicated  methods,  involving 
great  delay  and  expense,  and  in  a  form  wholly  inadequate 
to  bring  about  a  full  and  fair  trial  of  the  cases. 

The  complications  were  multiplied  by  the  fact  that  the 
testimony  of  these  witnesses  would  necessarily  be  in  the 
language  of  those  countries.  Fortunately,  the  island  at 
the  time  was  under  the  military  control  of  the  United 
States,  and  this  situation  was  relieved,  so  far  as  taking 
testimony  in  Cuba  was  concerned,  through  the  issuance, 
by  the  military  government  in  Cuba,  of  Order  No.  79, 
dated  Habana.  March  15,  1902,  giving  any  commissioner 
duly  appointed  by  the  Spanish  Treaty  Claims  Commis- 
sion ample  power  to  take  testimony  in  Cuba,  which  order, 
by  an  enactment  of  Congress,  known  as  the  'Piatt  amend- 
ment,' became  a  permanent  law  of  that  island.  Further 
relief  was  given  by  an  act  of  Congress  approved  June 
30,  1902,  amending  the  act  of  March  2,  1901,  conferring 
additional   powers  upon   the  commission,   and   \esting  it 


43 

with  'all  the  powers  now  possessed  by  the  circuit  and 
district  courts  of  the  United  States  to  take  or  procure 
testimony  in  foreign  countries,'  and  by  an  act  approved 
June  28,  1902,  authorizing^  the  commission  to  appoint 
salaried  commissioners  to  take  testimony  in  Cuba,  and 
per   diem    comm.issioners    whenever    necessary. 

After  the  island  was  turned  over  to  the  Republic  of 
Cuba  it  was  soon  e>  ident.  notwithstandin,^  the  enabliuL': 
measures  above  mentioned,  that  they  were  so  vaguely 
comprehended  by  the  Cuban  courts  of  the  first  instance 
it  would  require  patient  negotiations  to  secure  the  active 
cooperation  of  the  judges,  without  which  no  progress  in 
the  way  of  taking  depositions  could  be  hoped  for.  The 
credit  of  overcoming  obstacles  is  largely  due  to  the  ser- 
vices of  Mr.  David  Mead  Massie,  of  Ohio,  appointed  by 
the  commission  as  a  salaried  commissioner  to  take  tes- 
timony in  Cuba,  by  virtue  of  the  act  of  Congress  above 
referred  to." 

Such  a  large  number  of  claims  may  be  expected  against 
Mexico  and  the  difficulties  in  the  way  of  proof  will  be  so  great 
that  an  adjudication  of  them  by  a  mixed  commission  would  be  a 
farce,  unless  there  were  incorporated  in  the  organic  act  establish- 
ing the  commission,  clauses  mandatory  and  binding  regarding 
the  ofifering  and  guaranteeing  of  facilities  for  securing  evidence 
and  tmless  there  was,  in  addition,  a  whole-hearted  and  honest 
spirit  of  co-operation  between  the  Governments  involved  that 
would  overcome  the  diffilculties  suggested  by  the  experiences  of 
the  Spanish  Treaty  Claims  Commission.  This  spirit  would  shorten 
by  years  the  sittings  of  the  Commission  and  at  the  same  time 
would  tend  to  make  the  adjudication  of  the  claims  equitable  and 
fair.  The  technical  difficulties  to  be  overcome  may  not  be  lightly 
viewed  and  the  negotiations  preceding  the  establishment  of  the 
commission  should  proceed  in  full  realization  of  the  enormous 
task  ahead. 

It  is  submitted  that  a  workable  agreement  providing  for  a 
mixed  claims  commission  should  include  articles  following  the 
suggestions  enumerated  below.  This  list  is  not  presented  as  a 
complete  framework  for  a  protocol,  but  merely  an  enumeration 
of  some  of  the  clauses  considered  of  importance. 

I.     The   commission   should   be   given   authority   to   examine 


44 

and  judge  by  a  vote  of  two  out  of  the  three  commissioners  the 
claims  presented. 

2.  There  should  be  provisions  regarding  procedure  in  case 
of  the  death  of  one  or  more  of  the  commissioners,  the  places  and 
times  of  meeting  and  of  the  oaths  of  said  commissioners. 

3.  The  Commissioners  should  be  limited  in  considering  evi- 
dence to  that  brought  forward  by  the  contending  Governments, 
but  should  be  bound  to  receive  all  such  evidence. 

4.  The  two  governments  should  be  permitted  as  counsel  one 
person  nominated  by  each  of  the  two  executives  and  the  claim- 
ant himself  shall  be  entitled  to  counsel.  The  Governments  should 
be  bound  to  furnish  the  commission,  at  its  request,  with  papers  in 
their  possession  which  might  be  pertinent  to  the  claims. 

5.  The  decisions  of  the  Commissioners  or  two  of  them  should 
be  final  and  conclusive  and  should  be  made  in  writing  for  each 
claim,  stating  the  amount  of  the  award  to  be  made,  if  any,  and 
the  date  from  and  to  which  interest  is  to  run,  if  any. 

6.  A  time  limit  should  be  fixed  within  which  claims  must  be 
presented,  thoug-h  a  provision  should  be  added  extending  that 
time  when  reason,^  for  the  delay  appear  valid  to  two  of  the  com- 
missioners. 

7.  The  commission  should  be  bound  to  make  all  of  its  deci- 
sions within  a  time  limit. 

8.  In  the  matter  of  procedure  the  commission  should  be  given 
almost  entirely  fu!i  rein. 

9.  Provision  should  be  made  for  the  payment  of  the  awards. 

10.  Records  of  proceedings  and  awards  should  be  kept.  Each 
executive  should  '^e  authorized  to  appoint  a  secretary  and  the 
commission  should  have  the  power  to  appoint  such  other  officers 
as  might  be  deeriied  necessary. 

11.  Expense-  should  be  divided  and  those  of  the  third  com- 
missioner  paid   I>y   the  two   Governments,  but  the  commission's 


45 

whole  expenses  partly  paid  by  reductions  from  the  awards  made 
to  a  limited  percentage. 

12.  A  method  of  ratification  should  be  laid  out. 

13.  The  commission  should  apply,  in  adjudicating  the  claims, 
the  well  recognized  principles  of  international  law. 

14.  Provision  should  be  made  for  examination  of  records 
and  documents  and  the  taking  of  depositions  in  both  countries. 

Mr.  Amos  S.  Hershey,  in  the  American  Journal  of  Interna- 
tional Law,^  in  an  article  on  "The  Calvo  &  Drago  Doctrines," 
discusses  the  legitimacy  of  the  average  international  claim  in  the 
following  interesting  fashion : 

"While  we  do  not  deny  the  responsibility  of  govern- 
ments to  foreigners  and  their  liability  in  certain  cases, 
even  during  times  of  civil  war  and  insurrection,  it  is 
certain  that  the  major  part  of  such  demands  are  usually 
far  in  excess  of  liability  and  are  based  on  erroneous 
principles.  The  following  examples,  selected  for  the  most 
part  from  Moore's  Work  on  Arbitration,  may  serve  to  illus- 
trate the  exorbitant  amounts  of  most  of  these  claims. 

"The  Civil  War  claims  of  Great  Britain  against  the 
United  States,  which  were  settled  by  a  mixed  commission 
in  1873,  amounted  (with  interest)  to  about  $96,000,000. 
Less  than  $2,000,000  was  actually  awarded  to  the  British 
claimants.  Of  the  478  British  claims,  259  were  for  prop- 
erty alleged  to  have  been  taken  by  the  military,  naval 
or  civil  authorities  of  the  United  States ;  181  for  prop- 
erty alleged  to  have  been  destroyed  by  the  military  and 
naval  forces  of  the  United  States ;  7  for  property  de- 
stroyed by  the  Confederacy ;  100  for  damages  for  the 
alleged  unlawful  arrest  and  imprisonment  of  British  sub- 
jects by  the  authorities  of  the  United  States;  77  for  dam- 
ages for  the  alleged  unlawful  capture  and  condemnation 
or  detention  of  British  vessels  and  their  cargoes  as 
prize  of  war  by  the  naval  forces  and  civil  authorities  of 
the  United   States. 

"The  claims  of  France  growing  out  of  tlie  Civil  \\'ar 
were  also  settled  by  a  mixed  commission  which  met  in 
1880-84.     They     aggregated      about     $35,000,000.      The 

8    Vol.   I,  p.  43. 


46 

amount  actually  awarded  was  $625,566.35,  i.  e.,  less  than 
2  per  cent  of  the  amount  demanded.  Many  of  the  claims 
are  said  to  have  been  fraudulent  and  others  were  greatly 
exaggerated.  Most  of  the  awards  were  for  injuries  in- 
flicted by  the  armies  of  the  United  States,  i.  e.,  presum- 
ably for  violations  of  the  laws  of  warfare. 

"The  claims  of  the  citizens  of  the  United  States  against 
Mexico,  presented  to  the  mixed  commission  which  met 
in  July,  1869,  and  continued  in  session  until  January, 
1876,  amounted  to  the  enormous  sum  of  $470,000,000. 
The  actual  amount  awarded  was  $4,000,000  or  less  than 
one  per  cent.  The  claims  of  citizens  of  Al^exico  against 
the  United  States  amounted  to  $86,000,000.  They  re- 
ceived $150,000. 

"The  mixed  commissions  v/hich  adjudicated  the  claims 
against  Venezuela  at  Caracas  during  the  summer  of  1903, 
awarded  2.313,711  bolivars  to  claimants  of  the  United 
States  out  of  81.410,952  which  were  demanded;  1,974.818 
to  Spanish  claimants  who  had  demanded  5,307,626; 
2.975,906  to  Italian  claimants  who  had  asked  for 
39,844.258:  2,091,908  to  German  claimants  who  had  de- 
manded 7,376,685;  9,401,267  to  British  claimants  instead 
of  14,743,572  as  demanded;  and  10,898,643  to  Belgian 
claimants  who  had  only  demanded  14,921,805  bolivars. 
The  demands  of  French  claimants,  which  amounted  to 
nearly  $8,000,000  were  cut  down  to  $685,000. 

"Besides  being  excessive  in  amount,  it  is  believed 
that  many  of  these  claims  are  bottomed  on  fraud  and 
tainted  with  illegality  and  injustice.  It  is  notorious  that 
the  sums  received  by  a  government  are  often  far  below 
the  face  value  of  the  loan  and  many  of  the  claimants  for 
losses  during  civil  war  or  insurrection  are  not  above  a 
well-grounded  suspicion  of  having  themselves  been  en- 
gaged in  unneutral  or  insurrectionary  acts. 

"In  view  of  the  ill-founded  character  of  many,  if  not 
most,  of  such  claims  and  of  the  danger  of  the  peace  and 
safety  of  the  states  of  Latin  America  resulting  from  their 
forcible  collection  by  leading  European  powers,  the 
United  States  would  be  fully  justified  even  in  advancing 
a  step  beyond  the  Drago  Doctrine  and  declaring  formally 
to  the  world  that  it  could  not  see  with  indifference  any 
attempt  at  the  forcible  collection  of  private  claims  of  a 
pecuniary  nature  on  the  Western  Continent.  The  Mon- 
roe Doctrine,  at  least  in  its  present  form,  forbids  the 
further  acquisition,  colonization  or  permanent  occupa- 
tion of  American  territory  by  any  European  power,  and 


47 

it  is  believed  that  sucli  a  declaration  wuuld  not  only  be 
in  harmony  with  the  spirit  of  that  doctrine  but  that  it 
would  lend  strength  to  the  principle  of  non-intervention. 

"In  view,  however,  of  the  fact  that  some  of  these 
claims  may  be  well-founded  and  that  the  judicial  tribunals 
in  certain  portions  of  Central  America  are  notoriously 
inadequate  for  the  impartial  and  effective  administration 
of  justice,  and  because  of  the  frequency  of  revolutions. 
due  mainly  to  fraudulent  elections,  it  might  be  well  to 
couple  this  declaration  with  another,  insisting  that  all 
such  claims  be  submitted  to  fair  and  impartial  arbitral 
tribunals  or  mixed  commissions  composed  of  representa- 
tives from  both  the  creditor  and  del:)tor  nations. 

"The  United  States  has  no  desire  to  become  a  'debt 
collecting  agency'  for  European  creditors  or  to  establish 
a  protectorate  over  the  states  of  Latin  America.  For 
these  reasons  our  government  should  avoid,  if  possible, 
the  responsibility  of  an  ex  parte  decision  regarding  the 
validity  of  these  claims,  although  the  assumption  of  such 
a  burden  would  be  preferable  to  their  forcible  collection 
by  European  powers.  Our  insistence  upon  arbitration 
in  the  case  of  the  famous  boundary  dispute  between  Great 
Britain  and  Venezuela  in  1895,  points  the  way  toward 
what  is  at  once  the  easiest  and  most  equitable  settlement 
of  such  disputes." 

There  are  many  classes  of  injuries  for  which,  under  Interna- 
tional Law,  there  can  be  no  compensation.  Enormous  losses  of 
these  varieties  have,  since  1910,  been  sustained  in  Mexico  and 
cannot,  because  of  their  nature  and  the  pecu'iar  circumstances 
involved,  be  repaired.  Many  foreigners  will  find,  even  in  cases 
where  there  has  unquestionably  been  grievous  injury,  that  their 
claims  will  often  stand  upon  no  valid  principles  of  legal  liability. 
In  addition,  there  will  probably  be  many  claims  which  would  be 
thrown  out  by  a  Commission  on  one  of  the  grounds  discussed  in 
Chapter  V. 

Various  estimates  have  been  made  regarding  the  total  number, 
and  the  aggregate  sum,  of  the  claims  which  will  be  presented 
against  Mexico.  All  of  such  estimates  are  at  best  guesses.  It  is 
safe  to  say,  however,  that  when  the  claims  are  finally  adjudicated 
in  the  light  of  the  rules  of  International  Law,  the  numlier  and 
amount  of  the  claims  will  be  shown  to  have  been  far  in  excess 
of  the  real  liabilitv  of  Mexico.     It  is  to  Mexico's  interest  to  have 


48 

the  claims  adjudicated  at  the  eariiest  possible  moment  in  order 
that  these  greatly  exa!3:g'erated  estimates  of  liability  will  be  dissi- 
pated. The  establishing-  of  Mexico's  true  liability  and  indebted- 
ness will  be  a  stabilizing  influence  both  to  her  and  to  the  world  in 
general.  Furthermore,  no  plans  for  the  rehabilitation  and  devel- 
opment of  Mexico,  a  rehabilitation  and  development  in  which 
other  nations  are  vitally  interested,  will  be  found  workable  which 
do  not  include  a  just  settlement  of  the  claims  problem.  Conse- 
quently such  plans  are  almost  certainly  doomed  to  at  least  partial 
failure  until  they  are  based  no  longer  on  estimated  liability,  but 
on  adjudged  indebtedness. 


49 


CHAPTER   IV. 

PARTICULAR  CLASSES  OF  CLAIMS.  THE  RULES 
OF  INTERNATIONAL  LAW  APPLICABLE  TO 
EACH. 

(A  classification  will  be  used  in  this  Qiapter  which  is  by  no 
means  perfect  and  some  of  the  groups  may  be  found  to  overlap 
others.  This  classification  has  been  intended  not  as  an  ideal  divi- 
sion but  as  a  convenient  one.  It  will  be  noticed  that  only  such 
claims  are  here  considered  as  might  arise  as  a  result  of  the  internal 
strife  in  Mexico  from  1910  to  date  or  of  governmental  acts  during 
this  period.) 

A. 

LAND,  PETROLEUM  AND  MINERAL  CLAIMS.  EFFECT 

OF  ARTICLE  2y  OF  THE  MEXICAN  CONSTI- 

TION  OF  1917. 

Where  there  is  a  conflict  of  laws,  questions  involving  land  are 
governed  by  the  lex  rei  sitae.'^  Local  limitations  on  the  right  to 
hold  property  and  on  the  exercise  of  property  rights  are  valid 
and  binding  within  the  commonly  accepted  principles  of  interna- 
tional law,  provided  these  limitations  are  placed  upon  nationals 
as  well  as  upon  foreigners,  and  provided  they  are  not  in  violation 
of  those  rights  of  man  (see  Chapter  I-A)  which  relate  to  prop- 
erty rights.  But  where  there  is  undue  discrimination  against 
aliens,  a  denial  of  justice  by  the  judex  rei  sitae  or  a  violation  of 
one  of  the  rights  of  man,  diplomatic  intervention  is  not  precluded. 
The  most  important  of  the  applicable  rights  of  man  would  be  the 
following:  The  individual  must  be  permitted  to  enjoy  his  prop- 
erty; vested  rights  must  be  recognized  and  not  interfered  with 
except  under  the  police  power ;  and  no  property  may  be  confis- 
cated without  due  process  of  law. 


1  Mr.  March,  Sec.  of  State,  to  Mr.  Seldlng.  March  3,  1856,  45  MS. 
Dom.  Let.  12:i.  To  the  same  effect,  see  Mr.  Fish,  Sec.  of  State,  to  Mr.  Conk- 
ling,  April  1.3.  1869,  80  MS.  Dom.  Let.  .564;  Mr.  Fish,  Sec.  of  State,  to  Mr 
Wilder,  May  6,  1876,  11.3  MS.  Dom.  Let.  294;  Mr.  Frelinshuvsen.  Sec.  of  State, 
to  Mr.  Hall,  Min.  to  Cent.  Am.,  June  18,  1882,  MS.  Inst.  Cent.  Am.  XVIII, 
24.">;  Mr.  Frelinghuysen,  Sec.  of  State,  to  Mr.  Scrugss,  Feb.  19,  1884,  MS.  Inst. 
Columbia,  XVII.  ^Hl ;  Mr.  Porter,  Acting  Sec.  of  State,  to  Mr.  Hall,  June  9. 
1885,  MS.   Inst.   Cent.  Am.   XVIII,   518. 


50 

It  is  well  to  note,  however,  that  erroneous  conceptions  of  the 
meanings  of  the  terms,  '"due  process  of  law,"  "property,"  "police 
power"  and  "vested  rights,"  and  mistaken  views  regarding  the 
sig'nificance  of  these  terms  in  constitutional  and  international  law 
are  prevalent.  This  may  be  explained  by  the  strong  faith  of  a 
large  part  of  humanity  in  the  absolute  truth  of  the  established 
order  and  the  great  inertia  of  this  group  toward  change.  This 
firm  belief  in  things  as  they  are  sways  this  group  toward  a  con- 
viction that  the  terms  quoted  above  are  fixed  and  unchanging  in 
their  connotations  within  the  purview  of  both  constitutional  and 
international  law.  In  consequence,  this  group  attempts  to  limit 
the  exercise  of  "police  power"  to  a  field  wherein  it  does  not  in- 
fringe on  "vested  rights,"  deeming  the  latter  to  be  property  rights 
as  they  stand  before  each  new  contemplated  restriction  under  the 
operation  of  the  "police  power." 

As  a  matter  of  fact,  these  terms  do  change  in  their  connota- 
tions.- 


2  In  a  recent  opinion  in  the  New  York  Supreme  Court  in  the  case  of 
People  ex  rel  Brixton  Operating  Corporation  v.  La  Fetra,  etc.,  Justice  Giege- 
ricli  discusses  tliese  terms  in   tlie  following  interesting  fashion: 

"At  the  outset,  in  the  consideration  of  the  constitutional  question 
presented,  it  should  be  remembered  that  the  meaning  of  the  words  police 
power  and  the  meaning  of  the  word  property  are  not  and  cannot  be  fixed 
and  unchanging.  The  two  concepts  are  more  or  less  in  conflict,  and  as 
one  is  enlarged  the  other  is  sometimes  correspondingly  diminished.  The 
one  represents  the  right  of  the  community  to  protect  itself.  The  Roman 
maxim  was  Salus  populi  suprema  lex.  The  other  represents  the  right  of 
the  individual  to  dominion  over  such  things  as  are  permitted  by  the  state 
to  be  the  subjects  of  ownership.  But  the  individual  right  of  dominion 
extends  only  so  far  as  the  welfare  of  the  community  permits  it  to  extend, 
or  probably  it  would  be  more  accurate  to  say  so  far  as  the  preponderant 
public  sentiment  of  the  time  deems  that  the  welfare  of  the  community 
can  safely  permit  it  to  extend.  As  .John  Stuart  Mill  expresses  it,  'The 
idea  of  property  is  not  some  one  thing,  identical  throughout  history  and 
incapable  of  alteration,  tint  is  variable  like  all  creations  of  the  human 
mind;  at  any  given  time  it  is  a  brief  expression  denoting  the  rights  over 
things  conferred  i)y  the  law  or  custom  of  some  given  society  at  that 
time:  but  neither  on  this  point  nor  on  any  other  has  the  law  and  custom 
of  a  given  time  and  place  a  claim  to  be  stereotyped  forever.'  (.31  Fort- 
nightly  Review,   513;   Chapters   on    Socialism,    p.   527.) 

"As  industrial  and  economic  and  social  conditions  change,  and   indeed 

as  public  sentiment  changes,  the  idea  of  property  changes,  and  with  it  the 
correlated  idea  of  police  power  changes. 

^               t               *               *               *                *               *                *  *                * 

"Whatever  injuries  an  individual  may  suffer  in  the  dimunition  of  his 
property  rights  are,  however,  deemed  to  be  made  up  to  him  by  his  shar- 
ing in  the  general  benefits  which  the  regulations  secure  to  the  community 
of  "which  he  is  a  member  (People  ex  rel  Nechamous  v.  Warden,  144  N.  Y. 
5''9  535)  •  *  *  *  .\nd  it  was  in  a  still  more  recent  case  (Atlantic  Coast 
Line  R  B  v.  Goldsboro,  232  U.  S.  548,  558)  that  the  court  said:  'It  is 
settled  that  neither  the  contract  clause  nor  the  "due  process"  clause  has 
the  effect  of  overriding  the  power  of  the  state  to  establish  all  regulations 
that  are  reasonably  necessary  to  secure  the  health,  safety,  good  order, 
comfort  or  general  welfare  of  the  .onimunity  *  »  *  and  that  all  con- 
tract and  property  rights  are  held  siibje<-t  to  its  fair  exercise.'" 


51 

There  is  a  conflict  between  vested  right  and  public  interest  which 
operates  to  alter  from  time  to  time  the  meaning  of  "property"  and 
to  change,  also,  the  meaning  of  "police  power." 

Property  rights  are  not  inviolable  when  the  public  interest  is 
involved.  The  foundation  of  this  principle  lies  in  the  fact  that 
the  individual  holds  property  rights  at  the  sufferance  of  society 
and  that  his  holding  is  in  the  nature  of  a  public  trusteeship.  It  is 
true  that  he  may  alienate  and  may  put  the  property  to  his  own 
use  with  an  almost  unlimited  independence,  but  he  is  not  per- 
mitted to  work  his  entire  free  will  on  his  property.  His  use  and 
occupation  is  subject  to  certain  very  definite  restrictions  imposed 
by  an  exercise  of  the  police  power  that  is  uniformly  approved. 
Moreover,  the  exercise  of  the  State's  right  of  eminent  domain 
very  clearly  deprives  the  individual  of  so-called  vested  rights  in 
the  interest  of  the  public  good.  A  restriction  or  abrogation  of 
vested  rights  is  not  always  accompanied  by  compensation.  The 
taking  of  property  under  eminent  domain  is  always  accompanied 
by  compensation  to  the  individual,  but  the  common  restrictions  on 
the  use  of  property,  for  example,  a  restriction  that  particular 
industries  may  not  be  undertaken  on  a  particular  piece  of  prop- 
erty (such  a  restriction  being  just  as  much  the  taking  of  vested 
property  rights  as  a  taking  under  eminent  domain),  do  not  in- 
volve compensation.  Moreover,  all  confiscations  of  property  in 
the  public  interest  are  not  compensated,  nor  need  thev  be.  When 
necessary  sanitary  measures  require  the  confiscation  of  private 
property ,3  the  State  is  not  compelled  by  any  nature  of  law,  munici- 
pal or  international,  to  compensate  the  individual  whose  property 
has  been  destroyed. 

There  is  nothing  fixed,  sacred  and  unchangeable  about  the 
term  vested.  It  connotes  merely  the  substance  of  the  tolerance 
of  society.  When  society  deems  necessary  to  the  general  good,  a 
change  in  the  quantum  of  rights  to  be  allowed  the  individual,  a 
modification  of  the  respective  connotations  of  the  terms  vested 
rights,  due  process,  and  police  power  occurs  which  reduces  the 
substance  of  the  vested  rights,  lessens  the  restrictions  of  the  due 
process  and  expands  the  police  power.  This  process  of  change 
is  no  contravention  of  a  sacred   rule  that  rights  are  fixed   and 


3    See  Chapter  IV-D. 


52 

cannot  be  altered  by  the  State  in  its  development,  but  rather  a 
manifestation  of  the  undoubtedly  sound  rule  that  private  rights 
must  be  subordinated  to  the  public  good. 

On  March  8,  192 1,  the  New  York  Court  of  Appeals  held 
constitutional  the  so-called  "Emergency  Rent  Laws."*  In  his 
opinion  Justice  Cuthbert  W.  Pound  says  as  follows : 

"The  legislative  or  police  power  is  a  dynamic  agency, 
vague  and  undefined  in  its  scope,  which  takes  private 
property  or  limits  its  use  when  great  public  needs  re- 
quire, uncontrolled  by  the  constitutional  requirement 
of  due  process.  Either  the  rights  of  property  and  con- 
tract must,  when  necessary,  yield  to  the  public  conveni- 
ence and  the  public  advantage  or  it  must  be  found  that 
the  State  has  surrendered  one  of  the  attributes  of  sov- 
ereignty for  which  Governments  are  founded,  and  made 
itself  powerless  to  secure  to  its  citizens  the  blessings  of 
freedom  and  to  promote  the  general  welfare. 

;[:  H^  4:  :):  *  ^;  * 

"Emergency  laws  in  time  of  peace  are  uncommon, 
but  not  unknown.  Wholesale  disaster,  financial  panic, 
the  aftermath  of  war,  earthquake,  pestilence,  famine  and 
fire,  a  combination  of  men  or  the  force  of  circumstances 
may,  as  the  alternative  of  confusion  or  chaos,  demand  the 
enactment  of  laws  that  would  be  thought  arbitrary  under 
normal  conditions.  Although  emergency  cannot  become 
the  source  of  power,  and  although  the  Constitution  can- 
not be  suspended  in  any  complication  of  peace  or  war, 
an  emergency  may  afiford  a  reason  for  putting  forth  a 
latent  governmental  power  already  enjoyed  but  not 
previously  exercised. 

He  *****  * 

"Laws  directly  nullifying  some  essential  part  of  pri- 
vate contracts  are  rare  and  are  not  lightly  to  be  upheld 
by  heavy  and  sweeping  generalization  on  the  common 
good,  but  no  decision  upholds  the  extreme  view  that  the 
obligation  of  private  contracts  may  never  be  directly  im- 
paired in  the  exercise  of  the  legislative  power.  No  vital 
distinction  may  be  drawn  between  the  exercise  in  times 
of  emergency  of  the  police  pcvrer  upon  the  property  right 
and  upon  the  contract  obligation  for  the  protection  of  the 

public  weal. 

******* 

"The  question  comes  back  to  what  the  State  may  do 
for   the   benefit    of   the    community    at    large.     Here    the 

4     Reported  in  the  New  York  Times,  March  9,  1921. 


53 

legislation  rests  on  a  secure  foundation.  The  struggle 
to  meet  changing  conditions  through  new  legislation  con- 
stantly goes  on.  The  fundamental  question  is  whether 
society  is  prepared  for  the  change.  The  law  of  each  age 
is  ultimately  what  that  age  thinks  should  be  the  law." 

The  New  York  rent  laws  were  held  constitutional  by  the 
Supreme  Court  of  the  United  States  in  the  very  recent  case  of 
Marcus  Brown  Holding  Company,  Inc.,  vs.  Feldman,  reported  in 
the  New  York  Law  Journal  of  April  23,  192 1. 

Mexico  has  recently  attempted,  within  the  spirit  of  this  mod- 
ern theory  of  property  rights  and  the  police  power,  to  conserve 
her  oil  and  mineral  resources  by  constitutional  provision.  In 
adopting  the  modern  theory,  she  came  into  conflict  with  the  rules 
of  international  law,  which  protect  certain  hard  to  define  but 
nevertheless  well-internationally  recognized  vested  individual 
rights.  An  appreciation  of  this  theory  of  property  rights  which 
is  rapidly  being  adopted  the  world  over,  is  necessary  to  a  clear 
appreciation  of  the  oil  situation  in  Mexico  as  the  Mexicans  are 
strong  contenders  for  this  theory  and  as  they  justify  their  position 
by  advancing  it. 

Since  the  birth  of  the  new  Mexican  Constitution  of  May  ist, 
191 7,  which  superseded  that  of  1857  and  came  into  efifect  shortly 
after  the  defeat  of  Huerta  by  Carranza's  party,  the  oil  contro- 
versy has  been  the  most  troublesome  international  problem  in  the 
Mexican  situation.  For  this  reason  the  subject  is  perhaps  treated 
at  greater  length  than  the  size  of  this  volume  would  ordinarily 
warrant. 

Article  27  of  the  new  Constitution  reads  in  part  as  follows: 

"The  ownership  of  lands  and  waters  comprised  within 
the  limits  of  the  national  territory  is  vested  originally 
in  the  Nation,  which  has  had,  and  has.  the  right  to  trans- 
mit title  thereof  to  private  persons,  thereby  constituting 
private   property. 

"Private  property  shall  not  be  expropriated  except  for 
reasons  of  public  utility  and  by  means  of  indemnification. 

"The  Nation  shall  have  at  all  times  the  right  to  im- 
pose on  private  property  such  limitation  as  the  public 
interest  may  demand  as  well  as  the  right  to  regulate  the 
development  of  natural  resources,  wdiich  are  susceptible 


54 

of  appropriation  in  order  to  conserve  them  and  equitably 
to  distribute  the  public  wealth.  For  this  purpose  neces- 
sary measures  shall  be  taken  to  *  *  *  prevent  the 
destruction  of  natural  resources.  *  *  *.  Private 
property  acquired  for  the  said  purposes  shall  be  consid- 
ered as  taken  for  public  utility  (in  the  public  interest). 

"In  the  Nation  is  vested  direct  ownership  of  all  miner- 
als *  *  *  petroleums  and  all  hydrocarbons — solid, 
liquid  and  gaseous. 

"In  the  Nation  is  likewise  vested  the  ownership  of  the 
water  of  territorial  seas     *     *     * 

"In  the  cases  to  which  the  two  foregoing  paragraphs 
refer,  the  ownership  of  the  Nation  is  inalienable  and  may 
not  be  lost  by  prescription  ;  concessions  shall  be  granted 
by  the  Federal  Government  to  private  parties  or  civil  or 
commercial  corporations  organized  under  the  laws  of 
Mexico     *     *     * 

"Legal  capacity  to  acquire  ownership  of  lands  and 
waters  of  the  Nation  shall  be  governed  by  the  followiilg 
provisions : 

"1.  Only  Mexicans  by  birth  or  naturalization  and 
Mexican  companies  have  the  right  to  acquire  ownership  in 
lands,  waters  and  their  appurtenances,  or  to  obtain  con- 
cessions to  develop  mines,  waters  or  mineral  fuels  in  the 
Republic  of  Mexico.  The  Nation  may  grant  the  same 
right  to  foreigners  provided  they  agree  before  the  Depart- 
ment of  Foreign  Affairs  to  be  considered  Mexicans  in 
respect  to  such  property,  and  accordingl}^  not  to  invoke 
the  protection  of  their  governments  in  respect  to  the 
same,  under  penalty  in  case  of  breach,  of  forfeiture  to  the 
Nation  of  property  so  acquired     *     *     *. 

"The  Federal  and  State  laws  shall  determine  within 
their  respective  jurisdictions  those  cases  in  which  the 
occupation  of  private  property  shall  be  considered  as 
private  utility  *  *  *  _  j*/!^  anvount  fixed  a\s  compen- 
sation for  the  expropriated  property  shall  be  hosed  on  the 
sums  at  ivhich  the  sasid  property  shall  be  valued  for  fiseal 
purposes  in  the  catastral  or  revenue  oifice  *  *  *  ^^  zuhich 
there  shall  be  added  ten-  per  cent.     *     *     *." 

The  Constitution  of  1917  was  not  adopted  by  means  constitu- 
tional under  the  old  Constitution  of  1857,  but  Mexican  authorities 
differ  in  interpreting  the  intended  character  and  effect  of  the  new 


30 

Constitution.  While  some  hold  the  new  Constitution  to  be  a  crea- 
ture fundamentally  diiTerent  from  its  predecessor  and  having  an 
entirely  independent  origin,  others  maintain  the  new  one  to  be  in 
the  nature  of  an  amended  edition  of  the  old.  A  great  many 
changes  were  made,  some  of  them,  like  several  in  Article  27,  very 
radical  changes,  but  a  comparison  of  the  two  constitutions  will 
show  that  the  general  plap  and  numbering  of  the  older  one  was 
followed  throughout  that  of  1917,  and  the  substance  in  general 
as  well.  The  intent  that  the  Constitution  of  191 7  should  be  in  the 
nature  of  an  amended  edition  of  the  older  one  is  important  in 
determining  questions  of  constitutional  construction. 

By  decrees  and  regulations  promulgated  since  the  establish- 
ment of  the  new  Constitution,  Article  27,  or  that  part  of  it  re- 
ferring to  subsoil  rights,  has  been  interpreted  retroactively  as 
well  as  prospectively,  and  it  has  been  this  retroactive  interpreta- 
tion which  has  been  the  main  subject  of  international  dispute  in 
the  oil  controversy. 

The  Mexican  Government  undoubtedly  has  the  moral  and  the 
international  right  to  regulate  the  holding;  of  property  and  the 
conservation  of  its  mineral  resources  in  any  way  it  sees  fit,  pro- 
vided there  .is  no  unjust  discrimination  against  foreigners  and 
provided,  also,  there  is  no  violation  of  international  rights. 
Consequently,  a  prospective  interpretation  of  Article  2^,  which 
would  apply  its  provisions  only  to  subsoil  rights  acquired  after 
May  I  St,  191 7,  would  be  no  violation  of  international  rights. 

■'It  is  the  duty  of  every  state  to  determine  the  property  which 
may  be  possessed  or  owned,  establish  the  legal  means  of  acquiring 
and  disposing  of  property,  and  assume  the  exercise  and  enjoyment 
of  all  the  rights  of  the  owner,  placing  the  foreigner  in  the  same 
position  as  the  citizen  with  respect  to  the  local  law  and  regula- 
tions."5 

"Legislative  jurisdiction  must  be  recognized  on  the  part  of 
the  territorial  sovereignty  in  the  following  respects : 

"(d)  To  limit  the  exercise  and  enjoyment  of  rights 
over  property  with  a  view  to  safeguarding  the  public 
interest  and  the  organization  of  landed  property  and  to 
assure  the  protection  of  the  rights  of  property. 


5    Fiore's   "International   Law    Codified,"    tr.   by    Borchard,    p.   453. 


56 

"(e)  To  regulate  the  effects  of  possession  and  the 
legal  consequences  arising  from  a  state  of  facts  and  re- 
lations established  between  persons  and  property  within 
the  national  territory." 


"Legislative  jurisdiction  concerning  property  situated  in  the 
territorv^  of  the  state,  considered  objectively,  must  be  ascribed 
exclusively  to  the  territorial  sovereignty. 

"This  sovereignty  has  not  only  the  power  to  determine  the 
legal  status  of  property,  but  has  also  the  power  to  fix  the  condi- 
tions necessary  for  the  validity  of  rights  in  rem  and  to  determine 
the  legal  resource  which  the  owner  may  have  as  to  his  own  prop- 
erty or  that  of  others  situated  within  the  national  territor\\"^ 

Retroactive  interpretation  of  Article  2"/  under  the  theory  that 
it  was  a  necessary  measure  for  the  conservation  of  the  national 
resources,  would  be  valid  enough,  in  international  contemplation, 
if  such  interpretation  were  combined  with  the  procedure  followed 
in  the  case  of  condemnation  under  the  right  of  eminent  domain, 
when  the  taking  of  vested  property  must  always  be  compensated,'^ 
Unfortunately,  this  solution  is  not  a  very  practical  one  in  view  of 
the  present  financial  situation  of  Mexico. 

But  a  bare  retroactive  interpretation  not  combined  with  com- 
pensation for  those  deprived  of  their  property  rights  vested  before 
the  enactment  of  Article  27.  is  a  clear  breach  of  international  law 
and  is  a  ground  for  diplomatic  intervention  by  the  home  Govern- 
ments of  foreigners  holding  such  previously  vested  rights.  Secre- 
tary of  State  Blaine  of  the  United  States  in  1881  said:  "*  *  * 
the  proposition  that  a  retroactive  law,  suspending  at  will  the  sim- 
plest operations  of  justice,  could  be  apDlied  without  question  to 
an  American  citizen,  is  one  to  which  this  government  would  not 
give  anticipatory  assent."^  "Every  person  who  voluntarily  brings 
himself  within  the  jurisdiction  of  the  country,  whether  perma- 
nently or  temporarily,  is  subject  to  the  operation  of  its  laws, 
whether  he  be  a  citizen  or  a  mere  resident,  so  long  as,  in  the  case 


6  Fiore,   pp.  450  and   451. 

7  See  Borchard's  Dip.  Pro.  of  Cit.  Ab.,  pp.  125-7  and  182. 

8  Mr.  Blaine,  Sec.  of  State,  to  Mr.  Lowell,  Min.  to  Gr.  Brit.,  May  26,  1881, 
For.  Rel.  1881,  530;  Moore's  International  Law  Digest. 


57 

of  the  alien  resident,  no  treaty  stipulation  or  principle  of  inter- 
national law  is  contravened."^ 

"The  legislature  is  an  organ  of  the  state  for  whose  acts  the 
state  is  directly  responsible.  It  has  been  noted  that  in  municipal 
law  no  action  lies  against  the  government  for  acts  of  legislation 
unless  the  statute  itself  or  the  constitutional  law  of  the  state  so 
prescribes.  But  a  statute  is  no  defense  against  a  breach  of  inter- 
national obligations.  When  acts  of  legislation, — among  which 
may  be  included  administrative  decrees  and  ordinances  having  the 
force  of  law — have  been  deemed  violative  oi  the  rights  of  aliens 
according  to  local  or  international  law,  foreign  governments  have 
not  acquiesced  in  the  theory  of  the  non-liability  of  the  state  and 
have  on  numerous  occasions  successfully  enforced  claims  for  the 
injuries  sustained  by  their  subjects. "^^ 

It  would  not  be  a  difficult  matter  for  Mexico  to  retain  the 
benefits  of  Article  27  and  at  the  same  time  avoid  a  violation  of 
vested  rights  and  a  consequent  breach  of  international  law. 

Article  14  of  the  Constitution  of  1917  runs  as  follows: 

"No  law  shall  be  given  retroactive  efifect  to  the  preju- 
dice of  any  person  whatever. 

"No  person  shall  be  deprived  of  life,  liberty,  property, 
possessions  or  rights  without  due  process  of  law  insti- 
tuted before  a  duly  created  court  in  which  the  essential 
elements  of  procedure  are  oljserved  in  accordance  with 
previously   existing  laws     *     *     *." 

If  the  above  Article  should  apply  to  Article  27,  a  retroactive 
interpretation  of  the  latter  would  be  clearly  illegal.  Article  14 
of  the  previous  Constitution  of  1857,  corresponding  to  Article  14 
of  that  of  1917,  ran  as  follows : — 

"No  retroactive  law  shall  be  enacted  *  *  *."  Certainly 
the  spirit  of  Article  14  is  against  retroactive  interpretations  even 
if  constitutional.  There  is  some  doubt,  however,  as  to  whether  the 
actual  wording  makes  Article  14  applicable  to  the  Constitution 
itself.  "Law"  has  been  variously  defined  and  interpreted.  Dic- 
tionaries give  it  a  very  wide  meaning  and  include  constitutional 


9  Mr.  Blaine,  Sec.  of  State,  to  Mr.  O'Connor,  Nov.  25,  1881,  139  MS.  Dom. 
Let.  603;  See  also,  Mr.  Blnine,  Sec.  of  State,  to  Mr.  Piatti,  Dec.  6,  1881,  140  MS. 
Dom.   Let.  86;   Moore's   International   Law   Digest. 

10  Borchard,   Dip.   Prot.  of  Cit.  Ab.,  p.  181. 


58 

provisions  and  even  customs.  In  the  case  of  State  e.r  rel  Teague 
z'.  Board  of  Com'rs  of  Silver  Bow  County, ^^  it  was  held  that  "law" 
as  used  in  the  Constitution,  Article  5,  Section  31,  which  provided 
that  no  law  shall  extend  the  term  of  office  of  a  public  officer  after 
his  election,  did  not  refer  to  the  Constitution.  In  Warfield  v. 
A'andiver,i2  "law"  was  held  not  to  apply  to  proposed  constitu- 
tional amendments  where  the  Constitution  said  "Bills"  must  be 
presented  to  the  Governor  before  they  can  become  "laws."  On 
the  other  hand  "law"  has  often  been  held  to  include  constitutions. 
In  Kern  v.  Arbeiter  Unterstuetzungs  Verein,i^  it  was  held  that 
the  State  and  Federal  Constitutions  are  "laws"  within  the  meaning 
of  How.  Ann.  St.,  c.  164,  Section  4,  which  contains  provisions  for 
beneficial  associations  organized  thereunder,  shall  not  make  rules 
contrary  to  the  laws  of  the  United  States  or  of  that  State. 

As  a  matter  of  constitutional  law  it  would  not  be  difficult  to 
give  only  a  prospective  interpretation  to  this  Article ;  in  fact,  the 
accepted  rules  of  constitutional  and  legislative  construction  are 
decidedly  against  an  unnecessary  retroactive  interpretation,  par- 
ticularly when  such  a  retroactive  interpretation  involves  a  taking 
of  vested  rights  as  the  term  is  ordinarily  understood. 

"A  doubtful  provision  will  be  examined  in  the  light  of  prior 
and  contemporaneous  history,  and  of  the  conditions  and  circmn- 
stances  under  which  the  constitution  was  framed.  The  court 
should  look  to  the  history  of  the  times,  and  examine  the  state  of 
things  existing  when  the  constitution  was  framed  and  adopted, 
with  a  view  to  ascertaining  its  objects  and  purposes.  It  should 
consider,  for  example,  the  former  law,  the  mischief  and  the  rem- 
edy intended  to  be  prevented.  In  such  cases  the  relation  of  a 
doubtful  provision  to  known  political  truths  and  to  political  insti- 
tutions will  be  considered ;  and  previous  legislation  and  the  usages 
of  the  government  will  also  be  given  weight. "^"^ 

"Many  of  the  state  constitutions  contain  provisions  against 
retrospective  laws.  But  even  in  states  where  specificallv  and 
formally  prohibited,  there  are  certain  classes  of  retrospective  laws 


11  87   Pac.   450. 

12  60  Atl.   5:?S. 

13  102  N.   W.  746. 

14  12   Corpus    Juris,    p.    710. 


59 

which  have  been  sustained  as  valid  and  constitutional.     The  pro- 
hibition is  against  only  such  retrospective  legislation  as  injuriously 

affects  some  substantial  right  of  a  citizen. "^-^ 

******* 

"For  the  purpose  of  determining  the  constitutionality  of  stat- 
utes there  is  a  strong  presumption  against  an  intent  to  give  them 
a  retrospective   operation,  whicli   can   be   overcome   only   by  the 

plain  terms  of  the  statute."^*' 

******* 

"The  adoption  of  constitutional  provisions  abrogating  or  other- 
wise affecting'  property  rights  operates  prospectively  and  has  no 
effect  on  property  rights  that  are  vested  at  the  time  of  their  adop- 
tion, unless  it  clearly  appears,  expressly  or  by  necessary  implica- 
tion, that  they  were  intended  to  operate  retrospectively. 

'.*  *  *  ^j^  intention  to  take  away  or  destroy  individual 
rights  is  never  presumed;  and  to  give  effect  to  a  design  so  unjust 
and  so  unreasonable  would  require  the  support  of  the  ir.ost  direct 
and  explicit  afffrmation  declarative  of  such  intent.  Also  where 
great  inconvenience  will  result  from  a  particular  construction,  or 
great  public  interests  will  be  sacrificed,  that  construction  is  to  be 
avoided  unless  the  meaning  plainly  requires  such  construction. 
And  where  the  literal  interpretation  involves  any  palpable  ab- 
surdity, contradiction,  or,  as  it  has  been  held,  any  extreme  hard- 
ship or  great  injustice,  the  courts  have  deviated  a  little  from  the 
literal  meaning  of  the  words,  and  interpreted  the  instrument  ac- 
cording to  the  apparent  intent  of  its  authors.  r>ut  this  rule  should 
be  applied  with  caution. 

"So  consideration  of  expediency  and  of  sound  public  policy 

may  be  of  detemiining  influence  in  case  of  doubt  as  to  the  real 

meaning  of  a  constitutional  provision  arising  from  the  uncertainty 

of  the  language  used."^''' 

******* 

"The  state  has  no  power  to  divest  or  impair  vested  rights, 
whether  such  an  attempt  to  do  so  be  made  by  legislative  enactment, 
by  municipal  ordinance,  or  by  a  change  in  the  constitution  of  the 
state.    This  result  follows  from  prohibitions  contained  in  the  con- 


1.5  ibid,  p.  1086. 

16  ibid.  p.  1091. 

17  ibid,  p.  703. 


6o 

stitutions  of  practically  all  the  states.  Before  the  adoption  of  the 
Fourteenth  Amendment  there  was  no  prohibition  in  the  Constitu- 
tion of  the  United  States  which  would  prevent  the  states  from 
passing  law's  divesting  vested  rights,  unless  these  laws  also  im- 
paired the  obligation  of  contracts,  or  were  ex  post  facto  laws ;  but 
vested  property  rights  are  now  protected  against  state  action  by 
the  provision  of  the  Fourteenth  Amendment  that  no  state  'shall 
deprive  any  person  of  life,  liberty  or  property  without  due  process 
of  law.'  "18 

(There  is  a  similar  "due  process"  clause  in  the  Mexican  Con- 
stitution— the  second  paragraph  of  Article  14  quoted  above.) 

The  retroactive  uncompensating  interpretation  of  Article  27 
cannot  stand.  Citizens  of  the  United  States  and  other  countries 
hold  large  tracts  of  mineral  lands  in  Mexico,  acquired  before  the 
birth  of  the  Constitution  of  1917,  and  their  respective  home  Gov- 
ernments will  not  countenance  a  confiscation  of  their  vested 
rights. 

It  is  encouraging  to  note  that  President  Obregon,  under  pro- 
nouncement April  2,  1 92 1,  made  executive  declaration  against  a 
retroactive  and  confiscatory  interpretation  of  Article  27,  in  these 
words : 

"The  present  administration  believes  the  time  has 
come  to  make  known,  through  its  foreign  representatives 
that  in  order  to  obtain  a  legitimate  prestige  among  other 
nations  of  the  world,  it  will  continue  to  follow  a  line  of 
conduct  absolutely  consistent  with  the  precepts  of  morals 
and  law,  wdiich  policy  it  adopted  several  months  ago  and 
demonstrated  by  a  number  of  acts,  and  which  it  will  con- 
tinue to  follow  without  interruption  until  all  its  purposes 
have  been  fulfilled. 

^  ^  ^  ^  ^  ^  i^ 

"Extraordinary  sessions  of  Congress  are  to  be  called 
to  discuss  principally  reforms  of  legal  character.  Article 
27  of  the  new  constitution,  inasmuch  as  oil  legislation  is 
concerned,  is  to  be  studied  with  a  spirit  of  equity  and  its 
dictates  to  be  changed  so  that  they  will  be  non-confisca- 
tory   nor  have   retroactive   interpretations." 

Furthermore,  legislation  has  been  introduced  into  the  current 


18    ibid,  p.  957. 


6i 

session  of  the  legislature  which  will  provide  for  the  application 
of  Article  14  to  Article  27.  (This  action  of  President  Obregon 
and  the  legislature  follows  the  recommendations  made  to  the 
Mexican  Government  by  the  writer.) 

(If  legislation  is  passed  withdrawing  the  retroactive  applica- 
tion of  Article  27,  and  it  is  almost  certain  that  such  legislation 
will  pass  in  the  comparatively  near  future,  a  great  problem  will 
arise.  What  will  be  the  rights  of  those  foreigners  who  under 
more  or  less  duress  accepted  Article  2^  in  its  present  interpreta- 
tion and  denounced  oil  properties  in  accordance  with  the  proce- 
dure laid  down  by  the  Mexican  Government?  This  problem  is 
one  of  some  difficulty,  but  no  attempt  will  here  be  made  to  solve 

it.) 

Having  attempted  to  define  the  principles  of  international  law 
applicable  to  the  oil  controversy,  we  come  to  the  most  difficult 
problem  involved — that  of  establishing  exactly  what  rights  were 
"vested"  when  the  1917  Constitution  went  into  effect.  Rights,  of 
course,  which  had  not  become  vested  on  May  i,  1917,  would  not 
be  protected  against  an  application  of  Article  27.  What  class  of 
sub-surface  properties,  then,  should  be  protected  as  vested  rights? 

Under  the  Old  Spanish  Law,  from  which,  upon  the  separa- 
tion of  Mexico  from  Spain,  the  Mexican  law  on  this  subject  was 
derived,  mineral  wealth,  though  in  the  hands  of  private  indi- 
viduals, constituted  the  property  of  the  Crown.  No  interest  in 
the  minerals  as  such  passed  under  a  Royal  grant  of  the  land  in 
which  they  were  contained,  without  express  words  designating 
them.  By  the  ordinary  grant  of  land,  only  an  interest  in  the 
surface  or  soil,  distinct  from  the  property  in  the  minerals,  was 
transferred. 

These  doctrines  of  the  Spanish  Law  were  established  at  a  very 
early  period.  Chief  Justice  Field  of  the  California  Supreme 
Court,  in  discussing  the  history  of  the  Spanish  and  Mexican 
mining  laws  in  the  case  of  Moore  zk  Smaw,^^  says : 

"By  a  law  of  the  Partidas,  which  was  promulgated  as 
early  as  1343,  it  was  declared  that  the  mines  were  so  vested 
in  the  king  that  they  did  not  pass  in  his  grant  of  the  land, 
though  not  excepted  in  terms:     Law  5,  tit.   15,  p.  2.     By  a 


19    17  Calif.  199  (1861)   79  Am.  Dec.  123,  at  p.  127. 


62 

law  of  Alphonso  XI,  all  mines  of  silver  and  gold,  and  of 
other  metals,  and  the  produce  of  the  same,  were  declared  to 
be  the  property  of  the  crown,  and  no  one  was  allowed  to 
work  them,  except  by  special  license  or  grant,  or  unless 
authorized  by  immemorial  prescription;  Rockwell's  Spanish 
and  Mexican  Laws,  126.  By  a  law  of  John  I,  this  rule  was 
modified,  and  a  general  license  was  granted  to  all  persons  to 
search  for  and  work  the  mines  in  their  own  lands,  and  by  per- 
mission of  the  owners,  in  the  lands  of  others,  and  to  retain 
one-third  of  the  net  produce,  the  balance  to  be  rendered  to 
the  king;  RockweH's  Spanish  and  Mexican  Laws,  126.  Under 
this  law,  few  mines  were  discovered  and  worked,  owing  in 
part,  as  was  supposed,  to  the  fact  that  a  great  proportion  of 
the  mines  of  the  country  had  been  previously  granted  to 
noblemen,  and  others  with  bishoprics,  arch-bishoprics,  and 
provinces,  with  exclusive  privileges.  To  remove  the  obsta- 
cles thus  interposed  to  the  discovery  and  development  of  the 
mineral  wealth  of  the  country,  Philip  II,  by  a  decree  pro- 
mulgated on  the  tenth  of  January,  1559,  annulled  all  previous 
exclusive  grants  made  by  himself  or  his  predecessors,  except 
in  those  cases  where  the  mines  were  at  the  time  worked;  and 
resumed  and  incorporated  into  his  patrimony  all  the  mines  of 
gold,  silver  and  quicksilver  in  his  kingdom,  wherever  found, 
'whether  in  public,  municipal,  or  vacant  lands,  or  in  inher- 
itances, places,  and  soils  of  individuals';  Halleck's  Mining 
Laws  of  Spain  and  Mexico,  6.  *  *  *  From  the  promul- 
gation of  this  decree,  the  ownership  of  the  precious  metals 
by  the  sovereign  throughout  the  dominions  of  the  Spanish 
monarchy  was,  in  all  subsequent  legislation,  fully  recognized, 
and  the  policy  of  allowing  all  persons  to  search  for,  and  upon 
discovery  to  work,  the  mines,  was  rigidly  followed." 

Ordinances  pursuant  to  this  decree  were  passed  at  various 
times.  Without  referring  to  their  provisions,  it  is  sufficient 
to  state  that  they  all  proceeded  upon  the  admitted  right  of 
the  Crown  to  the  minerals.  "Those  established  on  the 
twenty-second  of  August,  1584,  and  generally  designated  as 
the  'new  ordinances,'  to  distinguish  them  from,  regulations  of 
an  earlier  date  known  as  the  'old  ordinances,'  whilst  revoking 


63 

all  previous  laws,  edicts,  privileges,  and  customs,  in  express 
terms  excepted  the  decree  of  January  lo,  1559,  so  far  as  it 
vested  in  the  crown  all  mines  of  gold  and  silver  and  quick- 
silver, and  annulled  all  grants  which  had  been  previously 
made."-^  In  Article  22  of  the  Royal  Mining  Ordinance  of 
1783,  published  by  proclamation  of  the  Viceroy  throughout 
New  Spain  in  January,  1784,  and  revoking  all  previous  ordi- 
nances on  the  subject,  the  right  is  granted  by  the  crown  to 
denounce  mineral  deposits,  including  "bitumens  and  the 
juices  of  the  earth."  Doubtless  oil  would  be  included  under 
this  denomination. 

When  Mexico  became  independent  of  Spain,  the  Mexican 
Government  claimed  and  exercised  the  rights  and  pri\  ileges 
of  the  Spanish  Crown  in  regard  to  the  mineral  wealth  within 
its  borders.  By  the  Amendment  of  December  14,  1883,  to  the 
Constitution  of  1857  (Article  72,  Section  X  of  the  1857  Con- 
stitution) Congress  was  given  the  power  "To  enact  codes  of 
mining  *  *  *  obligatory  throughout  the  Republic."  In 
execution  of  this  power,  the  Federal  Government  promul- 
gated in  1884  a  Mining  Code  unifying  the  law  on  this  subject 
throughout  the  country. 

Article  10  of  the  Mining  Code  of  November  28,  1884. 
reads  in  part  as  follows : 

"The  following  substances  are  the  exclusive  property 
of  the  owner  of  the  soil,  who  may,  therefore,  exploit  and 
avail  himself  of  them  without  the  need  of  denouncement 
or  special  adjudication; 

I.  The  deposits  of  the  various   kinds   of  coal. 
jj    *     *     * 
jjj    *     *     * 

IV.  The  salts  existing  on  the  surface,  the  fresh  and 
salt  waters,  whether  found  on  the  surface  or  under  the 
ground ;  pet-roleum  and  g"aseous  or  thermal  and  medicinal 
water  springs." 

It  would  seem  that  a  more  emphatic  statement  that  petro- 
leum is  "the  exclusive  property  of  the  owner  of  the  soil" 
could  hardly  be  formulated.  Furthermore,  the  Civil  Code  of 
1870  further  substantiates  the  provisions  of  the  Mining  Code. 

20     (idem.) 


64 

Article  827  reads : 

"Ownership  is  the  right  to  enjoy,  to  use  and  dispose 
of  a  thing,  without  any  other  limitations  than  those  fixed 
by  law." 

Article  828  reads : 

"Property  is  inviolable.  It  cannot  be  occupied  ex- 
cept for  cause  of  public  utility  and  upon  previous  indem- 
nity." 

Article  829  reads : 

"The  owner  of  land  is  the  owner  of  its  surface  and 
of  that  which  is  thereunder.  He  may,  therefore,  use  it 
and  make  on  it  all  the  works,  plantations  or  excavations 
which  he  may  wish,  under  the  restrictions  established 
under  the  Title  of  Easements,  and  subject  to  the  pro- 
visions of  the  special  Mining  Legislation  and  the  Police 
Regulations." 

The  Civil  Code  of  1884-1  repeated  exactly  the  provisions 
established  by  Articles  827  to  829,  inclusive,  of  the  Civil  Code 
of   1875. 

The  next  Mining  Code  was  passed  in  1892.  Article  4  of 
this  law  reads: 

"The  owners  of  the  soil  shall  freely  exploit,  without 
the  necessity  of  any  special  concession  in  any  case,  the 
following  mineral  substances :  Mineral  combustibles, 
mineral  oils  and  waters,  the  rocks  of  the  land,  in  general, 
which  may  serve  as  direct  elements,  or  as  raw  materials 
for  the  purpose  of  building  or  ornamentation,  the  sub- 
stances of  the  soil,  such  as  earth,  sands  and  clays  of  all 
kinds,  the  mineral  substances  for  which  no  concession 
is  required  under  x^rticle  3  of  this  Law  and,  in  general, 
all  those  not  specified  in  said  Article."  -^ 

It  has  been  contended  that  this  legislation  of  1892,  which 
merely  allows  the  owner  of  the  soil  to  exploit  his  own  land 
for  oil,  and  says  nothing  regarding  his  ozmtership  of  such  sub- 
soil wealth,  impliedly  changes  the  law  in  regard  to  his  prop- 
erty in  such  deposits.  It  is  more  likely,  however,  that  the 
Legislature  took  for  granted  that  the  owner  retained  the  title 


21  Article  729   to   731   inclusive. 

22  Article  3  referred   to  in   the  above  question   does  not   contain   any   ref- 
erence to   petroleum  or   mineral   oils. 


65 

to  the  subsoil  deposits  which  had  previously  been  granted 
him  by  the  Mining  Code  of  1884,  and  merely  declared  his 
fullest  right  to  exploit  them  as  an  incident  to  such  ownership. 
Subsequently  there  was  passed  the  Codigo  de  Mineria  of 
November,  1909,  which  went  into  effect  on  January  i,  1910, 
and  was  in  force  at  the  time  the  191 7  Constitution  was 
adopted.  While  this  Mining  Code  of  1909  declares  in  Chapter 
I,  Article  i,  that  there  is  in  the  Nation  direct  ownership 
(dominio)  of 

"I.  Ore  bodies  of  all  inorganic  substances  which  in 
veins,  in  blankets,  or  in  masses  of  whatsoever  form,  con- 
stitute deposits,  the  composition  of  which  is  distinct  from 
that  of  the  country  rock,  such  as  deposits  of  gold,  plat- 
inum, silver,  copper,  iron,  cobalt,  nickel,  manganese,  lead, 
mercury,  tin,  chromium,  antimony,  zinc  and  bismuth ;  of 
sulphur,  arsenic  and  tellurium ;  of  rock-salt ;  and  of 
precious  stones. 

"II.   Placers  of  gold  and  platinum." 

it  expressly  provides  in  Article  2  that  among  those  things 
which  are  "the  exclusive  property  of  the  owner  of  the  soil" 
shall  be  "ore  bodies  or  deposits  of  mineral  combustibles  of 
whatsoever  form  or  variety"  and  "ore  bodies  or  deposits  of 
bituminous  substances."  In  this  law,  therefore,  unlike  the 
previous  Code  of  1892,  and  in  accord  with  that  of  1884,  the 
stress  is  again  placed  on  ownership  rather  than  on  the  right 
to  exploit.     Article  2  in  full  reads  as  follows : 

"The    following    are    exclusive    property    of    the    owner 
of  the  soil : — 

I.  Ore  bodies  or  deposits  of  mineral  combustibles,  of 
whatsoever   form   or  variety. 

II.  Ore  bodies  or  deposits  of  bituminous  substances. 

III.  Ore  bodies  or  deposits  of  salt  which  outcrop  at 
the  surface. 

IV.  Springs  of  surface  and  subterranean  waters,  sub- 
ject to  the  prescriptions  of  the  general  law  and  of  the 
special  laws  on  waters,  without  prejudice  to  the  pro- 
visions of  Article  9. 

V.  The  country  rock  and  substances  of  the  soil,  such 


66 

as  slate,  porphyry,  basalt    and  limestone,  and  the  earths, 
sands  and  clays. 

VI.  Bog    and    residual     iron,    allu\ial    tin,    and    the 
ochres." 

These  Mining  Codes,  passed  pursuant  to  the  amendment 
of  December  14,  1883,  to  the  Constitution  of  1857,  it  is  con- 
tended by  many  North  American  and  other  foreign  oil  oper- 
ators, changed  the  law  of  Mexico  as  to  coal  and  oil  deposits 
in  that  they  excepted  these  products  from  the  ownership  of 
the  State.  It  is  argued  that  the  purchase  of  surface  rights, 
subsequent  to  this  new  legislation,  carried  with  it  the  owner- 
ship of  subsoil  properties  as  well.  If  this  be  true,  to  put  into 
effect  the  provisions  of  Article  2^  of  the  Constitution  of  1917, 
with  regard  to  holdings  acquired  subsequent  to  1884  and 
prior  to  May  i,  1917,  would  be  to  make  the  Article  not  only 
retroactive  but  confiscatory  of  rights  perfected  and  vested 
prior  thereto. 

A  comparison  of  cases  decided  in  the  United  States  in 
regard  to  minerals,  under  Statutes  or  grants  analogous  to  the 
]\Iexican  Mining  Codes,  tends  to  confirm  the  conclusions 
reached  by  a  study  of  the  words  of  the  Mining  Codes  them- 
selves. 

Such  cases  in  this  country  have  repeatedly  held  that 
patents  of  land  by  the  Federal  Government  under  Statutes 
in  this  country  analogous  to  the  combined  force  of  the  Mexi- 
can Constitution  of  1857  and  the  Mining  Codes  authorized 
thereby,  include  both  surface  and  subsurface  rights,  unless 
the  latter  are  specifically  reserved  by  the  Federal  Govern- 
ment. 

For  example,  in  the  case  of  Moore  z'.  Smcm/,-^  in  interpret- 
ing the  Act  of  Congress  of  March  3,  185 1,  governing  land 
grants  in  California,  tlie  court  held  that  while  in  the  United 
States  title  to  public  lands  may  be  conveyed  without  pass- 
ing title  to  minerals  contained  therein,  a  patent  or  grant  of 
public  lands  by  the  Federal  Government  to  an  individual 
under  an  Act  containing  no  limitations  or  reservations  carried 
all  the  interest  of  the  United  States  in  everything  embraced 


.>3    17   Cal.    199    (1861),   79  AM.    Dee.    123. 


67 

within  the  signification  of  the  term  "land,"  and  this  included 
not  only  the  face  of  the  earth,  but  everything  under  it  and 
over  it,  as  in  the  case  of  an  ordinary  conveyance  by  an  indi- 
vidual. 

To  that  effect  the  Court  in  that  case  said : 

"The  question  arises  as  to  what  passed  by  the  patents 
*  *  *  and  to  this  question  there  can  be  but  one  answer: 
all  the  interest  of  the  United  States,  whatever  it  may  have 
been,  in  everything  connected  with  the  soil,  in  everything 
forming  any  portion  of  its  bed  or  fixed  to  its  surface,  in  every- 
thing which  is  embraced  within  the  signification  of  the  term 
'land' ;  and  that  term,  says  Blackstone,  'includes  not  only  the 
face  of  the  earth,  but  everything  under  it  or  over  it.  And, 
therefore,'  he  continues,  'if  a  man  grants  all  his  lands,  he 
grants  thereby  all  his  mines  of  metal,  and  other  fossils,  his 
woods,  his  waters,  and  his  houses,  as  well  as  his  fields  and 
meadows;'  2  Bla.  Com.  19.  Such  is  the  view  universally 
entertained  by  the  legal  profession  as  to  the  effect  of  a  patent 
from  the  general  government." 

So,  too,  in  Hill  V.  Martin^^  it  was  held  that  the  sale  of  state 
public  lands  under  a  state  law  providing  for  their  disposition 
but  not  reserving  the  minerals,  passes  the  title  to  the  subsoil 
wealth  as  well  as  the  surface.^^ 

In  U.  S.  V.  San  Pedro  &  Canon  Del  Agua  Co.,^®  however, 
the  Court,  in  passing  upon  a  patent  issued  under  the  same 
Act  of  Congress  of  March  3,  1851,  as  that  considered  in 
Moore  v.  Smaw,  decided  that  the  title  to  the  subsoil  wealth  did 
not  pass  by  the  issue  of  a  patent  under  that  act.  In  Moore  v. 
Smaw  the  California  Court  had  said  that  inasmuch  as  there 
was  nothing  in  the  Act  of  Congress  restricting  the  operation 
of    the    patents    to    the    interests    acquired    by    claimants    from 


24  Tex.   Civ.   A  pp.   1002,   70  S.   W.   4.30. 

25  Texas,  unlike  other  Western  and  fur  Western  States,  was  excluded 
from  the  operation  of  the  Congressional  Mining  Acts,  because  the  govern- 
ment never  obtained  any  public  domain  within  its  borders.  By  the  terms 
of  its  admission  Into  the  Union  it  retained  all  vacant  and  unappropriated 
land  for  the  purpose  of  paying  the  debts  contracted  by  it  while  an  inde- 
pendent  Republic,    and   has,   therefore,   its   own    mining   law. 

2G    4   N.   M.   225,    (1888),   17   Pac.  337,  at  405,  aff'd.   146  U.   S.   120. 


68 

the  former  government,  or  distinguishing  the  patents  in 
any  respect  from  the  general  class  of  conveyances  made, 
under  that  designation  by  the  United  States,  patents  should 
issue  to  all  claimants  alike,  w^hose  claims  have  been  finally 
confirmed,  without  w^ords  of  reservation  or  limitation,  "with 
the  exception  that  they  shall  not  afifect  the  interests  of  third 
persons — an  exception  which  would  exist  independent  of  its 
legislative  recognition."  The  court  in  U.  S.  v.  San  Pedro, 
however,  decided  that  the  lack  of  a  reservation  regarding 
mineral  rights  in  the  Act  of  Congress  of  March  3,  1851,  did 
not,  by  such  omission,  cause  the  passing  of  title  to  subsurface 
wealth  in  lands  conveyed  by  patents  under  such  act,  but,  on 
the  contrary,  patents  issued  under  such  an  Act  should  be 
construed  strictly  against  the  grantee  and  where  nothing  in 
the  Act  is  said  affirmatively  granting  such  mineral  wealth 
no  title  to  it  should  pass.  The  Court  distinguished  the  case 
from  Moore  v.  Smaw,  on  the  ground  that  this  was  not  a  case 
of  a  grant  of  land  in  which  mines  are  later  found,  but  a  con- 
veyance of  "well  known  mineral  land,"  and  that  the  early  and 
continuous  manifestation  of  Congress  of  its  purpose  to  re- 
serve mines  would  lead  the  Court  to  determine  that  under 
a  general  grant  of  confirmation  they  did  not  intend  to  direct 
the  conveyance  of  well  known  and  established  mines  of  gold 
and  silver. 

Applying  the  doctrine  of  this  case  to  the  Mining  Codes  of 
Mexico,  however,  does  not  change  the  result  reached  by  the 
rule  in  Moore  %\  Smaw.  For  if  the  Act  of  Congress  of  March 
3,  1851,  by  omitting  to  grant  or  reserve  subsoil  rights  left 
room  for  the  construction  of  the  Statutes  and  for  a  spelling 
out  of  the  intention  of  Congress,  the  Mexican  Mining  Code 
of  1884  and  its  successors  left  very  little  doubt  as  to  the 
intent  of  the  Mexican  legislative  body  in  respect  of  the  own- 
ership, and  exploitation  by  the  owner  of  the  surface,  of  petro- 
leum deposits  found  underneath  the  surface. 

The  case  does,  however,  make  an  interesting  distinction 
when  it  differentiates  between  lands  well  known  to  contain 
valuable  deposits  and  "those  where  at  the  time  of  the  patent 
there  is  no  reason  to  anticipate  such  a  condition."     Applied 


69 

to  Mexico  this  would  mean  that  oil  found  on  lands  purchased 
prior  to  May  i,  1917,  but  in  which  up  to  that  time  there  had 
been  no  reason  to  anticipate  petroleum  deposits,  would  not 
belong  to  the  owner  of  the  surface. 

It  is  interesting  to  note  that  on  November  18,  1920,  the 
Supreme  Court  of  the  Philippines  sustained  the  contention  of 
the  United  States  Government  that,  under  the  laws  in  elTect  in 
the  Islands  when  they  were  taken  over  from  Spain,  title  to  all 
mineral  and  petroleum  deposits  belonged  to  the  State,  that  upon 
the  acquisition  of  the  Islands  by  the  United  States,  this  countr>' 
succeeded  to  the  title  to  all  such  deposits  and  that  these  deposits 
could  only  be  exploited  with  the  permission  of  the  Govern- 
ment.-' The  most  interesting  part  of  this  case  is  the  fact  that  in 
it  the  United  States  took  the  position  taken  in  the  controversy 
over  Article  27  by  the  Mexican  Government. 


27    The  decision  is  reported  in  "La  Vanguardia,"  a  newspaper  of  Manila, 
issue  of  November  19,  1920. 


70 

B. 

2.     CONTRACT  CLAIMS. 

Contract  claims  should  be  divided  into  three  classes:  (i) 
those  arising  out  of  contracts  between  individuals ;  (2)  those 
arising  out  of  contracts  between  aliens  and  the  Mexican 
Government  (concessions)  ;  (3)  those  arising  out  of  defaults  on 
or  alterations  in  the  obligations  of  governmental  bonds  or  bonds 
guaranteed  by  the  Government.  These  classes  will  be  treated 
separatel}',  as  they  are  subject  to  different  rules  of  international 
law  and  practice. 

I. 

Contracts  Between  Individuals. 

In  the  case  of  contracts  between  individuals,  the  govern- 
ment of  the  foreign  contractor  should  only  interpose  when 
there  has  1>een  a  denial  of  justice  or  an  undue  delay  in  the 
administration  of  it  in  the  local  Mexican  courts.^ 


Contracts   With   the   Mej>:ican    Government — Concessions. 

Here,  again,  diplomatic  interposition  will  not  be  made 
available  to  prevent  an  anticipated  breach  of  international 
law.  There  must  actually  have  been  a  breach  and  a  denial  of 
justice.  Governments  are  not  as  zealous  in  pressing  the 
claims  of  citizens  arising  out  of  contract  as  in  the  case  of 
torts.  An  alien,  entering  into  a  contract  with  the  Mexican 
Government,  does  so  voluntarily,  taking  into  consideration 
the  possibilities  of  performance  and  the  risks  to  be  run.  Fur- 
thermore, he  submits  himself  to  the  operation  of  the  local 
law  when  contracting  abroad,  and  such  local  law  gives  him 
certain  remedies  which  he  must  pursue  before  he  may  right- 
fully seek  the  aid  of  his  home  government.  Besides,  a  govern- 
ment usually  allows  itself  to  be  sued  in  one  way  or  another, 
and   the   alien   is  rarely   without   a   local   remedy.      Mr.    Marcy,- 


1  Moore's    Arhi.    3456,    34.jS,    .3469-70;    Ralston    182. 

2  Wharton    II,    655. 


71 

tlien  Secretary  of  State  of  the  United  States,  in  1856,  stated  the 
Department's  policy  as  follows :  "The  government  of  the  United 
States  is  not  bound  to  interfere  to  secure  the  fulfillment  of  con- 
tracts made  between  their  citizen^^  and  foreign  governments,  it 
])eing  presumed  that  before  entering  into  such  contracts  the  dis- 
position and  ability  of  the  foreign  power  to  perform  its  obliga- 
tions was  examined,  and  the  risk  of  failure  taken  into  considera- 
tion." 

Diplomatic  intervention  may  undoubtedly  be  resorted  to 
if  one  of  the  following  situations  is  present:  (i)  where,  as 
mentioned  above,  there  is  a  denial  of  justice,  a  lack  of  facili- 
ties for  securing  justice,  or  an  undue  delay  in  its  administra- 
tion f  (2)  where  there  has  been  an  arbitrary  cancellation  of  a 
contract  (frequently  the  case  with  concessions)  without  re- 
course to  a  determination  by  a  judicial  body  regarding  the 
legitimacy  of  the  act  (this  being  in  the  nature  of  a  taking 
"without  due  process  of  law")^ — in  such  case  the  Calvo  clause 
in  the  concession  or  other  contract  depriving  the  alien  of  his 
right  of  appeal  to  diplomatic  aid,  has  been  held  by  the  claim- 
ant's government  to  be  no  bar;-"*  (3)  where  there  have  been 
other  arbitrary  acts,  such  as  might  reduce  the  vakie  of  con- 
tracts, presenting  a  situation  similar  to  the  immediately  pre- 
ceding one  f  (4)  when  the  governmental  breach  of  contract 
involves  a  tort — here  the  claimant's  government  will  be  much 
more  ready  to  assist  him  ;^  (5)  some  claims  are  considered 
especially  equitable  and  are  consequently  more  urgently 
pressed  f  (6)  when  an  arrangement  for  the  liquidation  of  a 
claim  has  already  been  made,  it  will  generally  be  enforced 
through  diplomatic  pressure. '^ 

Despite  their  reluctance  to  press  contract  and  concession 
claims  diplomatically,  goA'ernments  have  always  been  readv 
to  present  such  claims  to  boards  of  arbitration.^*^    "Practically 


3  Moore's   Arbi.   3517;   6   Moore's  Dig.   724;    Borchard    D.   P.   C.   A.   291. 

4  6  Moore's  Dig.  287;  Borchard  D.  P.  C.  A.  292. 

r.    Ralston  819,   .322;  Moore's  Arbi.   1643;  See  also,  Interul.   Law  Assn.  24th 
■port,    190S,   and   6   Moore's   Dig.   725. 
0    6  Moore's  Dig.  729,  724;   Moore's  Arbi.  3.567-8,  3465,  4939. 

7  For.   Rel.   1898,  274-91,  6  A.   J.   I.   L.    (1912),  396,  407. 

8  Wharton's   Dig.   II,  658;  6  Moore's   Dig.  714-15. 

9  6    Moore's    Dig.    719,    720-21,   711-12. 

10  Borchard,    Sec.   115. 


72 

all  international  commissions,  where  the  terms  of  submission 
in  the  protocol  could  be  construed  as  sufficiently  broad,  have 
exercised  jurisdiction  over  contract  claims,  for  example,  the 
United  States-Spanish  Commission  of  February  22,  1819,  the 
three  Mexican  commissions  of  April  11,  1839,  of  March  3, 
1849  (domestic),  and  of  July  4,  1868,  the  United  States- 
British  Commission  of  February  8,  1853,  and  August  18,  1910, 
the  United  States-Peruvian  Commission  of  January  12,  1863, 
the  United  States-French  Commission  of  January  15,  1880, 
the  United  States-Venezuelan  Commission  of  December  5, 
1885,  and  the  Venezuelan  Commissions  of  1903  sitting  at 
Caracas,  and  many  others.  A  conflict  arose  in  the  commis- 
sion of  July  4,  1868,  due  to  the  difficulty  of  reconciling  vacil- 
lating opinions  with  proper  judicial  action.  Commissioners 
Wadsworth,  Palacio  and  Umpire  Lieber  (though  the  latter 
was  not  always  consistent)  had  allowed  claims  on  contracts 
concluded  between  citizens  of  the  United  States  and  agents 
of  Mexico  for  the  furnishing  of  arms,  munitions,  and  other 
material  to  the  Mexican  Government,  on  the  ground  that  the 
failure  to  pay  for  such  goods  constituted  an  'injury'  to  the 
'property'  of  an  American  citizen  under  the  terms  of  the 
protocol.  The  Mexican  commissioner,  Palacio,  while  adher- 
ing to  the  view  of  his  colleagues  that  contract  claims  were 
within  the  jurisdiction  of  the  commission,  believed  that  a  de- 
mand and  refusal  of  payment  was  a  condition  precedent  to  the 
allowance  of  the  claim.  Subsequently,  upon  the  death  of  Dr. 
Lieber  and  the  resignation  of  Commissioner  Palacio,  Sir  Ed- 
ward Thornton  became  umpire  and  Sefior  Zamacona  the 
Mexican  commissioner.  Thereupon  a  different  view  was 
taken  as  to  the  jurisdiction  of  the  commission  over  contract 
claims.  Sir  Edward  Thornton  considered  that  he  ought  to 
follow  the  practice  of  the  Executive  of  exercising  discretion 
in  assuming  jurisdiction  of  contract  claims,  for  which  reason, 
while  admitting  the  jurisdiction  of  the  commission  over  con- 
tract claims,  he  declined  to  allow  such  as  were  based  upon 
voluntary  contract,  in  the  absence  of  clear  proof  of  the  con- 
tract and  proof  that  gross  injustice  had  been  done  by  the 
defendant    government.      The    decisions    of    the    commission. 


73 

therefore,  are  at  times  contradictory,  claims  of  exactly  the 
same  nature  having-  been  allowed  by  Wadsworth,  Palacio  and 
Lieber,  and  rejected  when  Zamacona  became  the  Mexican 
commissioner  and   Thornton   the    umpire. "^^ 


3- 

Bonds  of  the  Mexican  Government  or  Bonds  Guaranteed 

By  It. 

The  peculiar  nature  of  government  securities  and  the 
limited  rights  of  the  holders  of  such  securities  are  well  known, 
and  must  be  supposed  to  have  been  taken  into  consideration 
by  purchasers  of  and  traders  in  such  securities.  This  ex- 
plains in  great  measure  the  reason  for  the  general  interna- 
tional view  that  such  claims  should  be  presented  with  great 
reluctance. 

Some  publicists  hold  that  bond  contract  claims  are  in  the 
same  class  as  ordinary  contract  claims,  and  should  be  treated 
similarly. 12  Offsetting  these  we  have  the  followers  of  the 
doctrine  so  ably  supported  by  Dr.  Luis  Drago,  former  Minis- 
ter of  Foreign  Affairs  of  Argentinej^-"^  that  armed  foreign  in- 
tervention for  collecting  public  debt  should  be  a  breach  of 
international  law.  Many  have  misunderstood  the  true  Drago 
doctrine,  and  believed  it  to  have  been  a  protest  against 
any  kind  of  intervention,  even  peaceable  and  diplomatic.  The 
United  States  has  taken  the  attitude  as  expressed  in  the 
Porter  doctrine,  presented  by  General  Horace  Porter  at  The 
Hague  Conference,^'*  that  the  use  of  force  for  the  collection 
of  public  debts,  should  not  be  permissible  until  arbitration 
had  settled  the  justice  of  the  amount  of  the  del)t  as  well  as 
the  time  and  manner  of  payment.  Drago  has  not  tried  to 
preclude  diph^matic  interposition  for  the  collection  of  public 
debts.     The  question  has  been  presented  to  arbitral  tribunals 


11  Borchard    D.   P.   C.   A.   299. 

12  Vattel.    Book    2,    Chap.    14,    Sees.    214-216;    Phillimore.    3d    ed.    Book    2, 
Chap.   3,  8,  et  seq. ;   Hall,   6th  ed.,  276;   and   Moore's  Arbi.   .36.50. 

13  For.   Rel.    1903   1-5;   see   also   article   of   Amos    S.    Hershey,    "The    Calvo 
And  Drago  Doctrines"   in   1  A.  J.  I.   L.  24-45. 

14  Reported  in  Scott's  Hague  Peace  Conference  II   (Doc.)  357,  361. 


74 

in  several  instances,^"'  without  very  satisfactory  results  in  the 
way  of  establishing  clear  precedents.  Arbitration  is  surely 
the  preferable  way  of  settling  international  disputes  arising 
out  of  public  indebtedness.  Neither  the  claimant  nor  the  de- 
faulting state  can  have  much  objection  to  the  discussion  and 
determination  of  such  claims  by  a  neutralized  and  unbiased 
arbitral  body. 

A  situation  slightly  different  from  one  of  ordinary  public 
indebtedness  under  bond  issues,  is  presented  by  bonds  of 
private  corporations  which  have  been  guaranteed  by  the  Mexican 
Government.  It  is  submitted  that  Mexico  cannot  withdraw 
from  its  obligation  as  underwriter  or  insurer  of  such  bonds 
and  that  upon  her  default  on  such  an  obligation,  a  foreign 
government  may  rightfully  seek  diplomatic  aid  to  press  the 
claims  of  its  citizens  holding  such  bonds. 

One  of  the  greatest  problems  which  confront  Mexico 
and  which  must  be  satisfactorily  solved  before  foreign  capital 
can  again  feel  safe  in  investing  in  Mexican  enterprises  is  the 
settlement  of  claims  based  on  losses  occasioned  by  the  de- 
fault of  the  Government  in  its  capacity  as  guarantor  of  pri- 
vate and  public  service  and  railroad  bonds.  As  stated  above, 
the  obligation  of  the  Government  is  clear,  but  the  losses  sus- 
tained are  so  large  that  it  is  probable  that  some  arrangement 
will  have  to  be  made  whereby  the  Government  would  be 
discharged  of  its  international  liability  upon  partial  payment 
or  will  be  given  time  within  which  to  pay.  Whether  such 
arrangements  will  be  made  under  a  Mixed  Claims  Commis- 
sion or  under  an  agreement  between  the  Mexican  Govern- 
ment and  a  committee  of  bankers  or  bondholders  remains  to 
be  seen.  Unquestionably,  the  latter  is  preferable  and  should 
be  urged  by  all  parties  concerned,  as  such  agreement  will  per- 
mit of  a  general  consideration  of  the  rehabilitation  of  the 
I)roperties.  This  would  be  of  great  advantage,  and  would 
probably  insure  to  the  Republic  much  needed  transportation 
facilities  and  to  the  bondholders  a  profitable  and  good  future 
investment  of  capital.  The  situation  should  not  and  cannot 
satisfactorily  be  viewed  from  the  single  viewpoint  of  adjudi- 


15     Borchard    D.    P.    C.    A.,    Sec.    124. 


75 

cation  and  payment,  but  must  rather  be  viewed  in  a  broader 
way,  looking-  to  reconstruction,  rehabilitation  and  the  devel- 
opment of  facilities  upon  which  the  whole  economic  future 
of  the  Republic  depends.  Mexico's  ability  to  pay  her  just 
obligations  is  primarily  conditioned  on  her  economic  and 
financial  future,  which,  in  turn,  is  unquestionably  dependent 
on  transportation  facilities.  Transportation  is  the  determin- 
ing factor  in  the  development  of  Mexico,  and  the  settlement 
of  claims  respecting  railroads  and  bonds  must  be  made  in 
the  light  of  national  development,  otherwise  the  entire  finan- 
cial and  economic  structure  will  collapse  and  the  collection 
and  payment  of  even  adjudicated  claims  will  be  found  im- 
possible. 


76 
C. 

ACTS  OF  AUTHORITIES. 

Broadly  speaking",  the  liability  of  Mexico  for  acts  of  its 
"authorities"  is  determined  by  the  ordinarily  accepted  rules 
of  private  law  respecting  agency.  So,  clearly,  she  is  responsi- 
ble for  the  acts  of  her  officials  within  the  scope  of  their  au- 
thority.^ It  is  equally  clear  that  she  is  not  responsible  for 
the  acts  of  officials  outside  of  their  apparent  authority. 

"The  general  rule  of  international  law  observed  by  the 
United  States  is  that  sovereigns  are  not  liable  in  diplomatic 
procedure  for  damages  occasioned  by  the  misconduct  of 
petty  officials  and  agents  acting  out  of  the  range  not  only 
of  their  real  but  of  their  apparent  authority. "- 

"The  responsibility  for  acts  of  its  functionaries,  be  these 
administrative  or  judicial,  rests  upon  a  personal  basis,  rather 
than  a  material  one,  as  in  the  case  of  responsibility  for  acts 
of  private  individuals.  The  relation  to  the  individual  con- 
cerned rather  than  the  act  itself  makes  the  state  responsible. 
Another  distinction  of  importance  is  the  question  of  responsi- 
bility for  acts  done  within  and  without  the  scope  of  an  offi- 
cer's agency.  Acts  within  the  scope  of  an  officer's  agency,  if 
in  contravention  to  the  principles  of  international  law,  will 
be  regarded  as  acts  for  which  the  government  is  responsible. 
An  exception  should  be  made,  however,  in  cases  of  military 
commanders  when  responsibility  will  be  primarily  a  matter  of 
circumstance,  depending  on  the  nature  of  the  acts.  The 
enactment  of  statutes  by  which  a  state  denies  responsibility 
for  acts  of  its  agents,  are  without  international  sanction  and 
are  an  unjustifiable  attempt  on  the  part  of  the  state  to  ex- 
tricate itself  from  its  international  obligations.  As  regards 
acts  without  the  scope  of  an  officer's  agency,  these  can  no 
more  give  rise  to  an  international  obligation  than  can  a 
burglary  or  hold-up.  Munici])al  law  should  provide  means 
of  recovery  against  such   individuals.     International   compli- 


1  6  Moore's   Dig.   999. 

2  Mr.   Adee,    Act.    Sec.    of   State,    to   Baron    de    Fava,    Italian    ambass.,    No. 
602,  August  14,   1900,   MS.   Notes  to   Italian   Leg.   IX,  451,  453. 


77 

cations  arise  where  such  legislation  is  lacking,  and  not  from 
the  acts  themselves."^ 

Outrageous  oppressions  and  cruelties  by  government  offi- 
cials have  often  been  made  the  subject  of  diplomatic  repre- 
sentations.* 

Judicial  bodies  or  justices  are  not  considered  agents  of 
the  government  in  the  sense  that  the  government  is  liable  for 
their  judicial  acts,''  and  Mexico  would  not  ordinarily  be  liable 
for  the  wrongful  acts  of  its  lower  and  inferior  courts.^  This 
is  principally  on  the  theory  discussed  in  Chapter  II,  Part  B, 
Section  2,  that  the  individual  should  exhaust  his  local  rem- 
edies before  asking  diplomatic  interposition. 

In  the  case  of  the  claim  of  Jonan  ik  Mexico,  of  July  4, 
1868,'''  the  failure  of  the  Mexican  Government  to  prevent  an 
illegal  assumption  of  jurisdiction  by  a  court,  on  remon- 
strance, was  held  by  the  United  States  Government  to  place 
upon  the  Mexican  Government  the  responsibility  for  injuries 
resulting.  In  the  case  of  Colesworth  and  Powell,  British 
citizens,^  the  Colombian  Government  condoned  or  approved 
the  illegal  act  of  a  judge,  and  the  British  Government  held  the 
Colombian  Government  to  responsibility  on  the  ground  that 
the  British  citizens  had  no  redress  other  than  through  diplo- 
matic channels.  The  United  States  interposed  against  Great 
Britain  in  the  case  of  the  Barque  Jones,  February  8,  1853,^ 
when  the  British  Government  refused  to  investigate  an  unjust 
judgment  but  sustained   it  after  remonstrance. ^^ 


3  Julius  Goebel,  .Tr.  "International  Responsibility  of  States"  VIII  Amer. 
Jour.   Int.   Law,  p.  816. 

4  Case  of  Wheelock,  brought  in  Venezuela,  6  Moore's  Dig.  744 ;  Case  of 
Wilson,  shot  at  Blueflelds,  For.  Rel.  (1894)  468;  For.  Eel.  (1894),  470,  475, 
477;  6  Moore's  Dig.  746;  Case  of  Geo.  Webber,  subjected  to  cruelties  in  Turkey, 
6  Moore's  Dig.  746;  Case  of  Dr.  Shipley,  For.  Rel.  (1903)  733;  6  Moore's  Dig. 
747;  Case  of  a  Mexican,  Zambrona,  shot  by  a  U.  S.  Ranger,  For.  Rel.  (1904), 
473-482;  6  Moore's  Dig.  747;  and   many   others. 

5  See   6   Moore's    Dig.    Sec.    1002. 

6  Borchard  "Diplomatic  Protection  of  Citizens  Abroad,"  Sections  81  and 
12S. 

7  Moore's  "International  Arbitrations  Digest,"  page  3251. 

8  Moore's   Arbitrations,   pages   20.51,  2085. 

9  Moore's  Arbitrations,  page  3051. 

10  See  also  Holtzendorff  Handbuch,  II,  74,  Fiore  Dr.  Int.  Codifle,  Sec- 
tions 339,  340;  Calvo  I,  Section  .348;  Pradier-Fodere  I,  Section  402;  Bluntschli, 
Section   340,   as   cited   in    Borchard,   page  199,   Note  2. 


78 

"Where  there  were  judicial  proceedings,  the  Commission- 
ers recognized  the  principle  that  a  State  is  politically  answer- 
able only  for  the  decisions  of  its  highest  tribunals,  but  when 
the  course  of  decisions  in  the  highest  court  was  absolutely 
uniform,  and  a  reversal  of  the  condemnation  was  hopeless, 
the  claimant  was  not  required  to  show  that  he  had  prosecuted 
an  appeal. "11 

In  the  absence  of  one  of  the  factors  above  described,  the 
alien  must  pursue  the  available  legal  remedies  before  the 
State  can  be  held  accountable  by  his  home  government. 

A  different  situation  is  presented  when  the  alien  has  taken 
his  case  to  the  highest  local  court  and  has  there  been  denied 
justice. 12  Having  tried  without  success  to  obtain  justice  in 
the  highest  court  the  alien  has  no  other  recourse  than  an 
appeal  to  the  diplomatic  arm  of  his  own  government  for  aid. 
He  has  the  right  then  to  avail  himself  of  this  last  remedy,  a 
remedy  not  shared  by  the  national. 

It  is  not  true  that  Americans  doing  business  abroad  or 
participating  as  stockholders  in  a  business  abroad  subject 
themselves  to  the  local  law  to  such  an  extent  that  they  must 
sufifer  injustices  alike  with  nationals.  When  the  national  has 
exhausted  the  local  remedies  he  has  no  further  recourse ;  but 
the  alien  who  has  appealed  to  the  highest  local  court  and  has 
still  clearly  been  denied  justice  has  a  further  remedy, — the 
interposition  of  his  home  government. 

Where  there  has  been  some  flagrant  denial  of  justice  sanc- 
tioned by  the  court  of  last  resort  the  State  is  liable  for  this 
wrongful  act  of  its  highest  judiciary.i^  If  the  decision  of 
this  court  is  merely  an  erroneous  and  unjust  interpretation 
of  the  law,  without  any  unlawful  taint  or  irregularity  in  pro- 
cedure, the  State  will  not  be  brought  under  liability.  "Pro- 
vided the  system  of  law  conforms  with  a  reasonable  standard 
of  civilized  justice  and  provided  that  it  is  fairly  administered, 


11  Moore's  Arbitrations,  page  4472,  discussing  the  opinion  of  Commissioner 
Kane  on  the  French  indemnity  of  1831;  see  also  ibid,  page  4544.  Final 
Report  on  the  Van  Ness  Convention  with  Spain,  February  17,  1834,  to  the 
same  effect. 

12.     Borohard,  p.  197. 

13     Borchard,   Section  81  and  128. 


79 

aliens  have  no  cause  for  complaint  in  the  absence  of  an  actual 
denial  of  justice."^"* 

It  must  appear  clearly  that  there  has  been  something  un- 
lawful or  irregular  about  judicial  proceedings  before  a  gov- 
ernment should  intervene  in  behalf  of  a  citizen  claiming 
judicial  injustice  abroad.^''  The  maladministration  of  justice, 
alone,  will  not  suffice.  Even  an  adjudication  based  on  an 
evidently  erroneous  interpretation  of  the  law  will  not  do. 
There  must  be  fraud,  corruption,  bribery,  a  denial  of  a  fair 
opportunity  to  present  a  case,  or  some  similar  element,  to 
bring  the  situation  within  the  class  of  those  warranting  diplo- 
matic interposition. 

"It  has  already  been  observed  that  the  state  is  not  respon- 
sible for  the  mistakes  or  errors  of  its  courts,  especially  wdien 
the  decision  has  not  been  appealed  to  the  court  of  last  resort. 
Nor  does  a  judgment  invoh'ing  a  bona  fide  misinterpretation 
by  the  court  of  its  municipal  law  entail,  on  principle,  the  in- 
ternational liability  of  the  state.  Only  if  the  court  has  mis- 
applied international  law,  or  if  the  municipal  law  in  question 
is  in  derogation  of  the  international  duties  of  the  state,  or  if 
the  court  has  willfully  and  in  bad  faith,  disregarded  or  mis- 
interpreted its  municipal  law,  does  the  state  incur  interna- 
tional liability.-^' 

It  has  in  several  important  cases  been  held  that  "a  grossly 
unfair  or  notoriously  unjust  decision  may  be  and  has  been 
considered  as  equivalent  to  a  denial  of  justice."^'  In  the 
case  of  Frederic  Bronner  v.  Mexico,  No.  115,  decided  under 
the  Convention  of  July  4,  1868,1'^  Umpire  Thornton  held  that 
the  judgment  of  the  Mexican  Court,  which  had  approved  a 
confiscation  by  Customs  officials  of  imported  goods,  on  the 
ground  that  the  invoices  showed  fraud,  was  so  unfair  as  to 
amount  to  a  denial  of  justice.  In  his  report,  Thornton  said: 
"The  umpire  is  always  most  reluctant  to  interfere  with  the 
sentences  of  judicial  courts,  but  in  this  instance,  the  decision 


14  Borf'hard,  pa,ge  198;  see  also  page  197. 

15  Borchai-fl.   page  197. 

16  Borchard,   Dip.   Prot.   Cit.  Abroad,   p.  332. 

17  Borehard,    Dip.    Prot.    Cit.    Abrond,    p.   .340. 

18  Moore's    Internntiunal   Arbitrations,    p.   .3134. 


8o 

seems  to  be  so  unfair  as  to  amount  to  a  denial  of  justice." 
In  the  case  of  Jacob  Idler  z'.  Venezuela,  No.  2,  under  the 
Convention  of  December  5,  1885,  between  the  United  States 
and  Venezuela,  the  Commission  held  that  the  judgment  of 
the  Superior  Court  should  not  be  binding  and  awarded  dam- 
ages to  Idler  on  contract  claims  which  had  been  denied  by 
the  Venezuelan  Courts.  The  decision  was  based  on  very 
much  the  some  theory  as  the  Bronner  case.^^ 


19    Moore's   Intei-uational   Arbitrations,   p.   3497. 


8i 
D. 

SANITARY  MEASURES. 

During  the  epidemic  of  diarrhea  cholera  in  the  Valley  of 
Parahyba,  State  of  Rio,  Brazil,  in  1894,  traffic  over  the  rail- 
road from  Rio  de  Janeiro  to  Sao  Paulo  was  suspended  and 
several  lots  of  watermelons  were  seized  and  destroyed  by  the 
Sanitary  Authorities  of  the  State  of  Sao  Paulo.  Some  of  the 
producers  of  these  melons  were  citizens  of  the  United  States 
and  their  claims  for  indemnity  having  been  denied  by  the 
State  of  Sao  Paulo,  they  appealed  to  their  own  Government 
for  diplomatic  aid.  In  August,  1896,  the  Department  of  State 
held  that  the  measures  taken  by  the  Sanitary  Authorities  were 
justified  by  the  circumstances  and  that  no  indemnity  could 
be  demanded  by  the  Americans  involved. ^ 


1     Mr.  Adee,  Act.   Sec.  of  State  to  Mr.   Thompson,  Min.   to  Brazil,   No.   350, 
August  21,  1896,  MS.   Inst.   Brazil  XVIII,  202;  and   see  6  Moore's  Dig.  751. 


82 

E. 
ACTS  OF  SOLDIERS. 

Mexico  is  not  liable  for  the  unauthorized  acts  of  its  sol- 
diers unless  they  were  acting  in  the  field  or  constructively 
under  its  authority  in  contravention  of  the  rules  of  civilized 
warfare. 1 

"A  tribunal  of  arbitration,  sitting  in  Chile,  adopted  certain 
rules  of  decision,  among  which  was  the  following: 

'Acts  committed  by  soldiers  or  persons  connected  with 
the  army  without  orders  from  their  superiors  in  com- 
mand do  not  ccmpromise  a  g'overnment.' 

With  reference  to  this  rule  the  Department  of  State  said : 

'The  position  of  this  Government  is,  that  while  a 
government  is  responsible  for  the  misconduct  of  its 
soldiers  when  in  the  field,  or  when  acting  either  actually 
or  constructively  under  its  authority,  even  though  such 
misconduct  had  been  forbidden  by  it,  it  is  not  responsi- 
ble for  collateral  misconduct  of  individual  soldiers 
dictated  by  private  malice.  But  the  mere  fact  that 
soldiers,  duly  enlisted  and  uniformed  as  such,  commit 
acts  "without  orders  from  their  superiors  in  command," 
does  not  relieve  their  government  from  the  liability  for 
such  acts.'  "  "^ 

in  the  case  of  Owen  Young,  a  United  States  citizen,  who 
was  shot  and  killed  on  September  24,  1884,  by  a  Peruvian 
soldier,  when  the  former  protested  at  the  acts  of  soldiers  who 
had  overrun  his  place  after  an  engagement  with  the  enemy, 
the  United  States  demanded  punishment  of  the  criminal  and 
reparation  to  the  family  of  the  deceased.  Secretary  of  State 
Frelinghuysen  based  his  claim  as  follows : — 

"The  mere  fact  that  soldiers,  duly  enlisted  as  such,  commit 
acts  without  orders  from  their  superiors  in  command,  does 
not  exempt  their  Government  from  liability  for  such  acts.     A 


1  Pear's  Case,   For.   Rel.    (19(K))   701-702,  6  Moore's   Dig:.  762. 

2  Mr.  Bayard,  Sec.  of  State,  to  Mr.  Buck,  Min.  to  Peru,  No.  33,  Oct.  27, 
1885,  For.  Rel.  1885,  625.  The  United  States  is  not  liable  for  injuries  result- 
ing from  the  unauthorized  acts  of  individual  soldiers.  Mr.  Magoou,  law 
otficer,  division  of  insular  aft'airs,  Feb.  G,  1901,  Magoou's  reports,  32S. 


83 

government  may  be  responsible  for  the  misconduct  of  its  sol- 
diers when  in  the  field,  or  when  acting,  either  actually  or 
constructively  under  its  authority,  if  such  misconduct,  even 
though  it  had  been  forbidden  by  it,  was  in  contravention  of 
the  rules  of  civilized  warfare."*^ 

When  Jose  M.  Delgado,  an  American  citizen,  was  shot 
under  the  orders  of  the  Spanish  General  Melguizo  during  the 
Cuban  insurrection,  despite  the  fact  that  Delgado  had  ex- 
hibited his  United  States  citizenship  papers,  the  American  Sec- 
retary of  State,  Olney,  demanded  reparation."* 

Again,  when  Bernard  Campbell,  a  citizen  of  the  United 
States,  was  beaten  in  April,  1899,  by  soldiers  of  the  Haytian 
army,  presumably  for  his  refusal  to  serve  in  the  Haytian 
navy,  the  United  States  demanded  a  substantial  indemnity.-^ 


3  Mr.  Frelinghuysen,  Sec.  of  State,  to  Mr.  Phelps,  mln.  to  Peru,  No.  81, 
Dec.  5,  1S84,  For.  Rel.  1885,  587;  Mr.  Bayard.  Sec.  of  State,  to  Mr.  Buck,  min. 
to  Peru,  No.  85,  Aug.  24,  1886,  MS.  Inst.  Peru,  XVII,  231.  For  prior  cor- 
respondence in  relation  to  this  case,  see  For.  Rel.  1884,  432-436;  For.  Rel. 
1885,  587-616. 

4  Mr.  Olney,  Sec.  of  State,  to  Mr.  Taylor,  min.  to  Spain,  May  11,  1896, 
For.  Rel.  1896,  586-588. 

5  Mr.  Gresham,  Sec.  of  State,  to  Mr.  Smythe,  min.  to  Hayti,  Jan.  31, 
1896,    For.    Rel.    1895,   II,   811. 


84 
F. 

ARREST  AND  IMPRISONMENT. 

Probable  cause  is  all  that  is  necessary  to  justify  arrest, 
and  where  proceedings  are  regular  and  the  foreigner  is  really 
an  offender  or  there  is  good  cause  to  believe  him  such,  no 
reparation  may  be  asked  for  his  arrest  and  none  for  his  im- 
prisonment if  he  is  brought  to  an  early  trial  and  given  the 
recognized  rights  of  a  person  accused  of  crime.  "With  refer- 
ence to  the  case  of  Dr.  Peck,  a  citizen  of  the  United  States, 
while  in  Cuba  for  his  health,  who  was,  as  it  was  alleged, 
arrested  and  thrown  into  prison  without  accusation  of  crime, 
the  Department  of  State  said :  'The  United  States  ask  no 
immunity  for  their  own  citizens  when  offenders,  but  they 
cannot  quietly  submit  to  see  them  arrested  and  thrown  into 
prison  and  there  detained  without  any  charge  against  them.'  "^ 

Where  the  arrest  is  palpably  false  or  the  detention  irregu- 
lar the  claim  for  reparation  may  be  instituted.'^ 

Forcing  accused  and  imprisoned  aliens  to  labor  pending 
trial  is  clearly  a  contravention  of  international  law.  "In 
remonstrating  against  the  action  of  the  Mexican  authorities 
in  the  case  of  two  American  citizens,  who,  while  imprisoned 
at  Piedras  Negras  on  a  charge  of  crime,  of  which  they  were 
afterwards  acquitted,  were  compelled  to  labor  on  the  public 
highways  until  the  court,  on  the  protest  of  the  American 
consul,  relieved  them,  the  Department  of  State  said:  'The 
deprivation  of  liberty  following  upon  a  charge  of  crime  is 
allowed,  because,  without  it,  the  punishment  of  criminals 
would  be  impracticable,  although  in  many  cases  the  innocent 
may  thus  be  made  to  suffer  unjustly.  The  exaction  of  labor 
rests  on  a  wholly  different  ground.  It  is  essentially  a  penalty, 
just  as  the  imposition  of  a  pecuniary  fine ;  and  it  is  understood 


6  Mr.  Marcy,  Sec.  of  State,  to  Mr.  Cueto,  Span,  min.,  unofficial,  April 
IT,  1855,  MS.  Notes  to  Span.   Leg.  VII,  56. 

7  Case  of  Frederick  Nevs,  in  Hayti,  MS.  Inst.  Hayti,  III,  304,  305,  310. 
6  Moore's  Dig.  Sees.  1011,  1012.  The  case  of  Van  Bokkelen  in  Hayti,  Moore's 
Int.  Arbitra.  II,  1807-1853,  6  Moore's  Dig.  772,  is  an  example  of  the  violation 
of  treaty   rights  in  this   case  by   irregular  imprisonment. 


85 

thai    this    distinction    is    clearly    laid    down    in    the    Mexican 
law.'  "S 

"Detention  of  witnesses,  *  *  *  not  unduly  prolonged 
or  harshly  enforced,  *  *  *  is  merely  a  temporary  meas- 
ure in  the  administration  of  justice."^ 


8  Mr.    Blaine,    Sec.    of   State,   to    Mr.    Dougherty,    charge.    No.    42.3,    Dec.    2!), 
1890,  MS.  Inst.  Mexico  XXII.,  687. 

9  Mr.    Frelinghuysen,   Sec.   of   State,   to   Mr.    Langston,   Miu.    to   Hayti,    No. 
.'524,  .Tan.   20,  1885,   For.   Rel.   1885,  490.     6  Moore's  Dig.  77.3. 


86 
G. 

CLAIMS    BASED    ON    REVOLUTIONS    AND    INSUR- 
RECTIONS. 


IN  GENERAL. 

Claims  such  as  would  be  founded  upon  damages  sustained 
merely  as  the  result  of  operations  of  war  during  the  recent 
revolutions  and  insurrections  in  Mexico  are  not  usually  al- 
lowed. It  is  not  true,  however,  that  foreigners  must  always 
share  the  treatment  accorded  nationals.  If  the  nationals  are 
unjustly  treated  in  the  matter  of  presenting  or  adjudging 
claims,  the  foreign  resident  or  property  holder  may  rightly 
.resort  to  diplomatic  representations  by  his  home  govern- 
ment— he  is  iuit  left  to  suffer  injustice  merely  because  the 
nationals  are  accorded  injustice.  It  is  true,  however,  that 
where  there  exists  the  established  practice  of  denying  a  par- 
ticular class  of  claims  of  nationals,  and  there  is  no  interna- 
tionally adjudged  injustice  connected  with  the  practice,  such 
claims  by  foreigners  will  be  rightly  denied.  Where  there  is 
nothing  unfair  or  unjust  in  the  treatment  accorded  nationals, 
foreigners  must  share  in  the  treatment.  Most  claims  result- 
ing from  operations  of  war  or  revolution  are  ordinarily  denied 
under  the  theory  and  practice  as  stated  above. ^ 


1  Mr.  Cass,  Sec.  of  State,  to  Mr.  Burns,  M.  C,  April  26,  1858,  48  MS. 
Dom.  Let.  323.  Mr.  Seward,  Sec.  of  State  to  Mr  Mercier,  French,  min.,  Nov. 
8,  1862,  Dip.  Cor.  1S(>3,  II,  742;  same  to  same,  Feb.  24,  1863,  id.  732.  Mr. 
Seward,  Sec.  of  State,  to  Count  Wydenbruck,  Austrian  min.,  Nov.  16,  1865, 
MS.  Notes  to  Aust.  Leg.  VII.,  193.  Mr.  Fish,  Sec.  of  State,  to  Mr.  Thorn- 
ton, British  min..  May  16,  1873,  MS.  Notes  to  Gr.  Brit.  XVI.,  101.  Reaffirmed 
in  same  to  same.  Oct.  6,  1873,  id.  235.  Mr.  Bayard,  Sec.  of  State,  to  Mr. 
O'Connor,  Oct.  2!>.  1S85,  157  MS.  Dom.  Let.  483.  Mr.  Olney,  Sec.  of  State,  to 
Mr.  Thompson,  min.  to  Brazil,  No.  315,  Jan.  29,  1896,  MS.  Inst.  Brazil,  XVIII., 
171;  same  to  same.  No.  .358,  Oct.  10,  1896,  id.  210.  Moore,  Int.  Arbitrations, 
IV.,  3710,  adopted  in  Bacigalupi  v.  Chile,  United  States  and  Chilean  Claims 
Commission  (1901),  151.  See  also,  Wilson's  Case,  Spanish  Claims  Commis- 
sion (1881),  Moore,  Int.  Arbitrations.  IV.,  3674-3675.  Mr.  Magoon,  law  officer, 
division  of  insula-  affairs,  War  Dept.,  Feb.  6,  1901,  Magoon's  Repts.  338. 
Mr.  Blaine,  Sec.  cf  State,  to  Mr.  Langstou,  .July  1,  1881,  MS.  Inst.  Hayti,  II., 
275.  Mr.  Fish's  report  of  May  15,  1871,  giving  the  reports  of  Mr.  Whiting, 
Solicitor  of  the  War  Department,  on  claims  by  aliens  for  damages  in  the 
civil  war,  is  in  Senate  Ex.  Doc.  2,  42  Cong.  Special  sess.  Mr.  Lawrence's 
report  on   war  claims  of  aliens  is  found  in   House  Kept.  262,  43  Cong.  1  sess. 


87 

Calvo-  denies  absolutely  the  responsibility  of  governments 
to  indemnify  aliens  for  losses  sustained  during  revolutions  as 
being  "a  deep  injury  to  one  of  the  constituent  elements  of  the 
independence  of  nations — that  of  the  territorial  jurisdiction." 

Pradier-Fodere-"^  points  out  the  inconsistency  of  the  posi- 
tion of  the  European  states  (and  v^ath  them  in  this  matter 
may  be  classed  the  United  States)  in  formally  asserting  the 
principles  of  responsibility  for  losses  occasioned  through  rev- 
olution when  the  defendant  government  is  one  of  the  Re- 
publics of  South  America,  and  denying  as  firmly  the  same 
principles  w^hen  they  are  themselves  defendants.  Whenever 
a  European  state  does  pay  an  indemnity  for  this  variety  of 
loss,  says  Pradier-Fodere,  the  payment  is  made  with  a  declara- 
tion that  it  is  "an  act  of  spontaneous  liberality,"  not  binding 
as  a  precedent.  In  supporting  Calvo  this  author  says  as  fol- 
lows: 

"To  sum  up,  the  generally  admitted  rule,  according  to 
which  in  principle  states  need  not  indemnify  foreigners  for 
losses  suffered  during  a  civil  war,  rests  on  the  following  very 
serious  conditions :  Foreigners  who  settle  in  a  country  to 
carry  on  their  business  submit  themselves  by  that  act  to  the 
same  lavv's  and  to  the  same  tribunals  as  citizens  of  the  coun- 
try, and  the  government  cannot  be  held  responsible  towards 
them  for  the  consequences  of  an  outbreak  or  of  a  civil  war, 
without  making  such  responsibility  an  unjustifiable  inequality 
between  foreigners  and  nationals.  Every  sovereign  state  has 
the  right  indeed  to  compel  respect  for  the  order  established 
in  its  territory,  even  by  the  employment  of  arms,  and  it  does 
not  rest,  in  respect  of  damages  which  result  from  resorting  to 
force,  under  obligations  more  extensive  as  to  foreigners  than 
as  to  its  own  nationals.  To  demand  this  would  be  to  do  in- 
jury to  the  territorial  jurisdiction  of  a  sovereign  state;  it 
would  introduce  into  international  relations  a  privilege  fa- 
vorable to  strong  states,  injurious  to  weak  states." 

But    Pradier-Fodere    does    limit    the    applicarion    of    Calvo's 
doctrine  "to  states  which  are  capable  of  fulfilling  their  inter- 


2  Droit   Int.   III.,  Sec.  1280. 

3  Traite   de   Droit    Int.    Pub.    I.,   343,   Sec.   20.5,    citing-   Calvo;    also    Funck- 
Bentano  and   Albert   Sorel   Precis  de  Droit  des  Geus,  1877. 


88 

national  obligations,"  and  with  such  as  are  not,  he  claims 
diplomatic  interposition  is  justifiable. 

Fiore*  asserts  that  foreigners  cannot  demand  indemnity 
for  injuries  resulting  from  "force  majeure"  or  from  the  gov- 
ernmental acts  necessary  to  the  suppression  of  a  revolution 
or  insurrection,  but  that  the  government  subjects  itself  to 
liability  if  it  does  not  do  everything  necessary  to  protect  the 
property  and  goods  of  foreigners  or  if  it  does  not  endeavor 
to  repress  the  violence  and  ofifenses  of  its  citizens. 

Hall^  seems  to  lean  strongly  to  Calvo's  doctrine,  saying : 
"The  highest  interests  of  the  state  are  too  deeply  involved 
in  the  avoidance  of  such  commotions  to  allow  the  supposition 
to  be  entertained  that  they  have  been  caused  by  carelessness 
on  its  part  which  would  affect  it  with  responsibility  towards 
a  foreign  state." 

Pillet^  states  the  rule  substantially  in  agreement  with 
Fiore. 

The  following  resolution  on  the  responsibility  of  states  for 
damages  suffered  by  foreigners  during  riots,  insurrections  or 
civil  war,  was  adopted  by  the  Institute  of  International  Law 
at  the  session  of  Sept.  lo,  1900J  and  clearly  presents  a  sound 
view  of  this  branch  of  international  law : 

'T.  Independently  of  cases  where  indemnity  may  be 
due  to  foreigners  in  virtue  of  the  general  laws  of  the 
country,  foreigners  have  a  right  to  indemnity  when  they 
are  injured  in  their  person  or  property  in  the  course  of  a 
riot,  an  insurrection,  or  a  civil  war;  (a)  when  the  act 
through  which  they  have  suffered  is  directed  against 
foreigners  as  such,  in  general,  or  against  them  as  sub- 
ject to  the  jurisdiction  of  any  given  state;  or  (b)  when 
the  act  from  which  they  have  suffered  consists  in  the 
closing  of  a  port  without  previous  notification  at  a  sea- 
sonable time,  or  the  retention  of  foreign  vessels  in  a 
port;  or  (c)  when  the  damage  results  from  an  act  con- 
trary to  law  committed  by  an  agent  of  the  authority ;  or 
(d)  when  the  obligation  to  make  indemnity  is  established, 
in  virtue  of  the  general  principles  of  the  laws  of  war. 


4  Droit    Int.    Pub.    Paris    1885,    C.    Antoine's    Translation    I,    Sec.    67.5. 

5  Int.  Law  Sth  ed.  222-223;  Bluutsehli,   Sec.  380;  Calvo,  Sees.  292-295. 

6  Les  Lois  actuelles  de  la  Guerre  (Paris  1901)  29. 

7  Annuaire  de  I'Institut  de  Droit  Int.  XVIII,  253-256. 


89 

"2.  The  obligation  is  likewise  established  when  the 
damage  has  been  committed  (No.  1  (a)  and  (d))  on  the 
territory  of  an  insurrectionary  government,  either  by 
said  government  or  by  one  of  its  functionaries.  Never- 
theless, demands  for  indemnity  may  in  certain  cases  be 
set  aside  when  they  are  based  on  acts  which  have  occurred 
after  the  state  to  which  the  injured  party  belongs  has 
recognized  the  insurrectionary  government  as  a  belliger- 
ent power,  and  when  the  injured  party  has  continued 
to  maintain  his  domicile  or  habitation  in  the  territory 
of  the  insurrectionary  government.  So  long  as  this  latter 
is  considered  by  the  government  of  the  injured  party  as 
a  belligerent  power,  claims  contemplated  in  line  i  of 
Article  2  may  be  addressed  only  to  the  insurrectionary 
government,  not  to  the  legitimate  government. 

"3.  The  obligation  to  make  indemnity  ceases  when  the 
injured  parties  are  themselves  the  cause  of  the  events 
which  have  occasioned  the  injury.  There  is  especially 
no  obligation  to  indemnify  those  who  have  entered  the 
country  in  contravention  of  a  decree  of  expulsion,  or 
those  who  go  into  a  country  or  seek  to  engage  in  trade 
or  commerce,  knowing,  or  who  should  have  known  that 
disturbances  have  broken  forth  therein,  any  more  than 
those  who  establish  themselves  or  sojourn  in  a  land 
offering  no  security  by  reason  of  the  presence  of  savage 
tribes  therein,  unless  the  government  of  said  country  has 
given  the  immigrants  assurances  of  a  special   character. 

"4.  The  government  of  a  federal  state  composed  of 
several  small  states  represented  by  it  from  an  inter- 
national point  of  view,  can  not  invoke,  in  order  to  escape 
the  responsibility  incumbent  on  it,  the  fact  that  the  con- 
stitution of  the  federal  state  confers  upon  it  no  control 
over  the  several  states,  or  the  right  to  exact  of  them  the 
satisfaction  of  their  own  obligations. 

"5.  The  stipulations  mutually  exempting  states  from 
the  duty  of  extending  their  diplomatic  protection  must 
not  include  cases  of  a  denial  of  justice,  or  of  evident 
violation  of  justice  or  of  jus  gentium. 

"  Recommendations. 

"The  Institute  of  International  Law  recommends  that 
states  refrain  from  inserting  in  treaties  clauses  of  re- 
ciprocal irresponsibility.  It  thinks  that  such  clauses  are 
wrong  in  excusing  states  from  the  performance  of  their 


go 

duty  to  protect  their  nationals  abroad  and  their  duty  to 
protect  foreigners  within  their  own  territory. 

"It  thinks  that  states  which,  by  reason  of  extraordi- 
nary circumstances,  do  not  feel  able  to  insure  in  a  suf- 
ficiently effective  manner  the  protection  of  foreigners  on 
their  territory,  can  escape  the  consequences  of  such  a 
state  of  things  only  by  temporarily  denying  to  foreigners 
access  to  their  territory     *     *     *     _ 

"Recourse  to  international  commissions  of  inquiry 
and  international  tribunals  is,  in  general,  recommended 
for  all  differences  which  may  arise  because  of  damages 
suffered  by  foreigners  in  the  course  of  a  riot,  an  insur- 
rection, or  a  civil  war." 

Mr.  Julius  Goebel,  Jr.,  in  his  admirable  article  in  8  Am. 
Jour.  Int.  Law,  p.  802,  on  "International  Responsibilities  of 
States,"  maintains  that  the  international  point  of  view  on  this 
question  represented  by  such  publicists  as  Calvo.  Pradier- 
Fodere  and  Hall,  is  based  on  an  erroneous  application  of  private 
law  principles  to  international  law  and  a  confusion  of  the 
fundamental  principles  of  diplomatic  interposition  and  the 
rights  of  states.  He  grants  that  the  state  is  not  responsible 
for  all  the  losses  sustained  as  a  result  of  revolution,  but  main- 
tains that  the  burden  should  be  on  the  state  to  excuse  itself 
from  liability,  whereas  the  theorists  above  mentioned  place 
the  risk  of  injury  on  the  foreign  resident  and  the  burden  upon 
him. 

Mr.  Goebel  at  p.  841  comments  on  the  attitude  toward 
this  question  once  aired  by  Mexicans : 

"Like  other  Latin-American  countries,  Mexico  since  her 
independence  had  been  prey  to  continuous  insurrection  dur- 
ing which  considerable  losses  had  been  sustained  by  foreign- 
ers, more  particularly  by  French  subjects.  The  basis  of  the 
relations  between  France  and  Mexico  was  a  provisional  treaty 
which  had  never  been  signed  by  Mexico,  and  for  this  reason 
no  attention  was  paid  to  French  demands.  France  finally 
made  a  peremptory  demand  for  an  indemnity  of  600,000 
francs,'^  but  this  was  refused,  and  according!}^  diplomatic  re- 
lations were  severed  and  Mexican  ports  declared  to  be  under 


27  Br.  &  For.  St.  Pap.,   p.  1178;  H.   Bancroft  Works,  Vol.  13,  p.  187. 


91 

blockade.  This  procedure  did  not  bring  Mexico  to  terms. 
Reinforcements  were  sent  and,  following  an  unsuccessful  con- 
ference, Vera  Cruz  was  bombarded  and  abandoned  by  the  in- 
habitants. At  this  point  Great  Britain  offered  to  mediate,  and 
the  two  contendents  agreeing,  a  new  conference  was  held. 
France  did  not,  however,  follow  up  her  advantage  but  ac- 
cepted practically  the  same  conditions  which  had  been  pre- 
viously offered  her  by  the  Mexican  Government.^ 

"During  the  course  of  the  dispute,  an  interesting  doctrine 
was  aired  by  the  Mexicans.  They  declared  that  :^*^  'We  are 
a  nation  always  agitated  by  revolutions ;  as  such  we  suffer  all 
the  consequences  of  a  state  of  revolution,  popular  tumult,  rob- 
beries, plunderings,  assassinations,  unjust  decrees,  and  since 
we  are  obliged  to  suffer  all  these  evils,  we  consider  that  the 
foreigners  who  may  be  in  our  country  must  suffer  like  our- 
selves, without  a  chance  of  redress  or  compensation.'  How- 
ever anarchistic  this  confession  of  faith  may  appear,  it  is  not 
an  isolated  expression  of  opinion.  It  stands  as  the  most  can- 
did and  concise  statement  of  the  principle  which  the  Latin- 
American  states  are   forever  reiterating." 

The  importance  of  the  general  principle,  that  claims  re- 
sulting from  operations  of  war  and  revolution  and  insurrec- 
tion are  not  recoverable,  cannot  be  overestimated  in  its  appli- 
cation to  the  present  Mexican  situation.  A  very  considerable 
number  of  the  alleged  existing  claims  against  Mexico,  which 
have  arisen  since  1910,  fall  within  the  operation  of  this  prin- 
ciple, and  its  fair  and  impartial  application  will  probably  in- 
validate the  claims  of  many  foreigners  who  were  occasioned 
real  suffering  but  who  are  measuring  their  expected  recov- 
eries not  on  established  principles  of  law  but  on  their  hopes 
for  indemnity.  A  full  and  clear  appreciation  of  the  meaning 
and  effect  of  this  principle  would  eliminate  one  of  the  chief 
elements  of  international  friction  in  the  Mexican  claims  situa- 
tion. An  elimination  of  claims,  which  not  only  do  not  present 
a  prima  facie  case  but  are  ruled  out  by  as  fundamental  a  prin- 
ciple as  the  one  above  discussed,  would  help  very  decidedly 


9  27  Br.  &   For.   St.   Pap.,   p.  1186  EC. 

10  Ibid.,   p.   1176. 


92 

to  clarify  the  claims  situation  and  to  focus  attention  upon 
those  claims  which  really  are  based  upon  sound  principles 
of  international  law. 


2. 

Martial  Law. 

In  the  institution  of  Martial  Law,  international  law  finds 
nothing  reprehensible.  Each  nation  is  left  to  declare  a  state 
of  martial  law  at  its  own  discretion,  and  the  fact  that  an  alien 
has  been  subjected  to  treatment  under  such  law,  more  severe 
than  would  have  been  his  treatment  under  the  civil  law,  will 
not  per  se  be  a  valid  basis  for  diplomatic  interposition  by  his 
home  government.^  Mr.  Seward,  the  U.  S.  Secretary  of  State, 
in  a  letter  to  Mr.  Edwards,^  said  that  it  had  been  the  expe- 
rience of  the  United  States  that  the  detention  of  neutrals  on 
suspicion  which  "investigation  found  insufficient  to  warrant 
the  continuance  of  such  restraint"  was  one  of  the  unavoidable 
incidents  of  civil  war. 

If  there  is  "probable  cause"  for  an  arrest  and  detention 
under  martial  law  no  claim  may  be  made.  In  the  case  of 
Manuel  Gil  dos  Reis,  a  Portuguese  subject  imprisoned  in 
Hawaii  under  martial  law,  the  United  States  Secretary  of 
State  declared  that  there  was  "probable  cause"  and  that  the 
arrest  under  martial  law  as  such  could  not  be  a  basis  for  an 
international  claim.-"^  But  if  the  act  under  martial  law  is  vin- 
dictive or  without  "probable  cause"  a  claim  will  be  pressed 
by  the  Government  of  the  offended  alien.  In  the  case  of  the 
Panama  "Star  &  Herald,"  a  newspaper  owned  and  edited  by 
Americans,  which  was  repressed  under  martial  law  in  Pan- 
ama in  t886,  the  United  States  insisted  on  reparation  to  the 
owners  on  the  ground  that  the  order  of  General  Santo 
Domingo  Vilar,  suppressing  the  paper,  was  a  vindictive,  un- 


1  See    ease   of    British    subjects    in    Memphis,    U.    S.    in    July,    1864.      Pari. 
Papers  No.  .363.  1864  or  1  Hallecks'  Int.  Lrflw   (Baker's  Ed.)   351. 

2  80  MS.  Dom.  Let.  369. 

3  Mr.  Hill,  Act.  Sec.   State,  to  Viscount  de  Santo  Thyrso,   Port.  Min.   Feb. 
15,  1901,  MS.   Notes  to  Port.   Leg.   VII.,  280. 


93 

authorized  act  by  a  military  authority  using  his  power  for  a 
vicious  purpose  and  making  his  government  responsible.^ 

It  is  probable  that  claims  will  be  made  against  the  Mexican 
Government  for  losses  sustained  incidental  to  a  detention  or 
imprisonment  under  martial  law.  Such  claims  will  be  invalid 
unless  the  losses  were  occasioned  by  thefts  and  pilferings  of 
the  authorities  who  enforced  the  martial  law.  The  Mixed 
Claims  Commission  organized  under  the  Spanish-United 
States  Agreement  of  1871  awarded  damages  to  an  American 
engineer,  part  of  whose  effects  had  been  stolen  by  Spanish 
soldiers  while  he  was  imprisoned  under  Spanish  martial  law 
in  Cuba.5 

3- 

Compensation   for   Property  Taken   or   Destroyed  for 
Belligerent  Purposes. 

When  property  is  taken  for  the  purposes  of  belligerency 
a  situation  arises  similar  to  that  of  the  exercise  of  "eminent 
domain"  and  adequate  compensation  must  be  made.  The 
following  is  a  good  statement  of  the  rule  and  its  logic : 

"Every  civilized  state  recognizes  its  obligation  to  make 
compensation  for  private  property  taken  under  pressure  of 
state  necessity,  and  for  the  public  good.  The  state  is  the 
transcendental  proprietary  of  all  the  property,  real  and  per- 
sonal, of  its  citizens  or  subjects.  This  transcendental  right — 
the  eminent  domain  of  the  state  in  all  countries  where  rights 
are  regulated  by  law — is  so  exercised  as  to  work  no  wrong, 
to  inflict  no  private  injury,  without  giving  to  the  party  ag- 
grieved ample  redress.  This  doctrine  was  not  engrafted  on 
the  public  law  to  give  license  to  despotic  and  arbitrary  sov- 
ereigns. It  has  its  foundation  in  the  organization  of  societies 
and  states,  and  is  as  essential  to  a  republic  as  to  the  most 
absolute  despotism.  It  is  of  the  very  essence  of  sovereignty, 
and  without  it  a  state  could  not  perform  its  first  and  highest 
duty,  its  own  preservation.     Vital  as  is  this  high  prerogative 


4  6  Moore's  Dig.  77.5,  782. 

5  Moore's    Jut.    Arbitration    IV,   3268.      See   also    S.    Ex.    Doc.    108,   41   Coiif 
2   Sess.   203,   204. 


94 

of  states,  it  must  be  exercised  in  subordination  to  the  clear 
principles  of  justice  and  right.  Whenever,  from  necessity  or 
policy,  a  state  appropriates  to  public  use  the  private  property 
of  an  individual,  it  is  obliged,  by  a  law  as  imperative  as  that 
in  virtue  of  which  it  makes  the  appropriation,  to  give  to  the 
party  aggrieved  redress  commensurate  with  the  injury  he  has 
sustained.  Upon  any  other  principle  the  social  compact 
would  work  mischief  and  wrong.  The  state  would  have  the 
right  to  impoverish  the  citizen  it  was  established  to  protect ; 
to  trample  on  those  rights  of  property,  security  for  which  was 
one  of  the  great  objects  of  its  creation.     *     *     * 

"  'Is  the  state  bound  to  indemnify  individuals  for  the 
damages  they  ha\e  sustained  in  war?  We  may  learn  from 
Grotius  that  authors  are  divided  on  this  question.  The  dam- 
ages under  consideration  are  to  be  distinguished  into  two 
kinds — these  done  by  the  state  itself  or  the  sovereign,  and 
those  done  by  the  enemy.  Of  the  first  kind  some  are  done 
deliberately  and  by  way  of  precaution,  as  when  a  field,  a 
house,  or  a  garden,  belonging  to  a  private  person,  is  taken  for 
the  purpose  of  erecting  on  the  spot  a  tower,  a  rampart,  or 
any  other  piece  of  fortification ;  or  where  his  standing  corn 
or  storehouses  are  destroyed  to  prevent  their  being  of  use  to 
the  enemy.  Such  damages  are  to  be  made  good  to  the  in- 
dividual, who  should  bear  only  his  quota  of  the  loss.'  (Vat- 
tel,  403.)     *     *     * 

"The  authorities  cited  (Vattel  and  Grotius)  are  direct  and 
emphatic,  and  are  supported  by  every  writer  of  respectability 
upon  public  and  national  law."*^ 

The  United  States  Government  insisted  on  the  indemnifi- 
cation of  some  of  its  citizens  who  were  forced  by  the  Spanish 
authorities  in  Cuba  to  build  defenses  and  to  contribute  large 
sums  for  other  military  constructions.^ 


6  Grant's  Case,  1  Ct.  CI.  41,  43-44,  citing  Mitchell  v.  Harmony,  13  How., 
113.  See  also.  United  States  v.  Russell,  13  Wall,  623.  See  Magoon's  Reports 
338,  615. 

7  Mr.  Fish,  Sec.  of  State,  to  Mr.  Mantilla,  Spanish  min.,  Jan.  11,  1876, 
MS.  Notes  to  Span.  Leg.  IX.,  414.  See  also  supra.  Sec.  540,  IV.,  20-21.  The 
exactions  here  referred  to  were  incidents  of  the  Ten  Years'  War  in  Cuha. 
1S6S-1878.  The  statement  tliat  they  could  not  he  justified  "in  time  of  peace" 
referred  to  Spain's  contention  that  war  in  the  international  sense  did  not 
exist.  See,  in  connection  with  the  foregoing  note  of  Mr.  Fish  to  Mr.  Mantilla, 
the  instruction  of  Mr.  Fish  to  Mr.  Cushing,  May  22,  1876,  supra,  Sec.  183, 
Vol.  2,  p.  65. 


95 

There  has  been  some  reluctance  to  compensate  for  the 
destruction  of  property  for  belligerent  purposes.  The  North 
German  Confederation,  of  which  Count  Bismarck  was  Chan- 
cellor, indemnified  the  British  owners  of  six  colliers  which 
were  sunk  in  the  River  Seine  by  Prussian  troops  during  the 
war  of  1870.^  It  is  doubtful,  however,  whether  any  other 
similar  claims  were  paid.'' 

Samuel  B.  Crandall,  in  his  article  on  the  "Law  Applied  by 
Spanish  Treaty  Claims  Commission,"!*^  says  of  the  work  of 
that  commission : 

"In  order  to  reco\er  for  the  burning  of  property  by  the 
Spanish  authorities  it  was  necessary,  under  the  ruling  of 
the  Commission,  to  show  either  that  the  burning  was  wanton 
and  unnecessary,  or  that  it  was  not  a  legitimate  war  measure. 
In  no  case  was  a  claimant  successful  in  recovering  for  the 
burning  of  cane  by  Spanish  authorities,  and  in  only  a  few 
cases  were  awards  made  for  the  burning  of  buildings  by  the 
Spanish  authorities.  (Casanova,  No.  33.)  The  evidence  be- 
fore the  Commission  in  the  various  cases  showed  that  a  large 
part  of  the  burning  of  buildings  chargeable  to  the  Spanish 
authorities  was  for  the  eiifective  enforcement  of  the  concen- 
tration of  the  rural  population  in  fortified  centers,  which  was 
recognized  as  a  legitimate  war  measure.  If,  however,  the 
Spanish  authorities  appropriated  or  made  use  of  the  claim- 
ant's property,  relief  was  granted.  Awards  were  made  in 
many  cases  for  the  appropriation  of  cane  tops  for  forage,  the 
use  of  buildings  as  quarters  for  the  troops  or  for  reconcen- 
trados  or  for  other  purposes.  In  the  Constancia,  No.  196, 
an  award  was  made  for  the  use  of  claimant's  private  railway 
by  the  Spanish  troops.  The  largest  and  most  numerous 
awards  were  made  for  the  appropriation  of  cattle  by  the 
troops.  (Reyes,  No.  153;  Del  Valle,  No.  222;  Del  Valle,  No. 
278;  Iznaga,  No.  279;  Iznaga,  No.  iii.)  Of  the  principle  of 
liability   fcr  the  appropriation   of  private   property  as   distin- 


8  61  Brit.  &  For.   St.   Pap.  575,  7,  8,  611. 

9  Mr.  Everett,  charge  at  Berlin,  to  Freliiighuyseu,  Sec.  of  State,  No. 
".00.  April  3,  1882,  Ms.  Desp.  from  Germany,  in  reply  to  Department's  No.  304, 
M:ircll    21,    1882. 

10  IV..    A.    J.    I.    L.,    p.    820. 


96 

guished  from  the  principle  of  liability  for  its  destruction  the 
Commission  in  its  final  report  says : 

'Awards  were  *  *  *  made  for  appropriations  of 
property  by  the  Spanish  authorities  in  cases  where  the 
property  was  used  by  such  authorities,  regardless  of  the 
purpose  of  the  appropriations.  In  other  words,  a  dif- 
ferent rule  was  applied  in  cases  where  property  was 
destroyed  to  prevent  its  falling  into  the  hands  of  the  enemy 
from  that  applied  where  property,  for  like  purpose,  was 
seized  and  used  by  the  Spanish  authorities.  In  the  one 
case,  ordinarily  the  state,  under  international  law,  incurs 
no  liability,  while  in  the  other,  the  owner  of  the  property, 
in  the  clars  of  cases  passed  upon  by  the  Commission,  is, 
in  the  opinion  of  the  Commission,  entitled  to  compensa- 
tion for  the  property  so  appropriated  and  used. 

'In  these  cases  (cattle  cases)  the  Spanish  ofificials, 
operating  from  their  permanent  garrisons,  made  the  ap- 
propriations systematically  from  time  to  time,  taking 
live  stock  for  the  sustenance  of  the  garrisons  and  for 
shipment  to  the  larger  cities  in  the  island.  These  ap- 
propriations for  shipments  were  undoubtedly  made  for 
the  double  purpose  of  furnishing  supplies  to  the  Spanish 
soldiers  stationed  at  the  points  to  which  the  cattle  were 
consigned,  and  at  the  same  time  to  prevent  their  appro- 
priation by  the  insurgents.' 

"Under  Number  lo,  of  the  governing  principles  announced 
by  the  Commission  in  April,  1903,  and  given  above — that  the 
stipulation  in  Article  VII  of  the  treaty  between  the  United 
States  and  Spain  of  1795,  that  the  subjects  and  citizens  of 
each  nation,  their  vessels  or  efifects,  should  not  be  liable  to 
any  embargo  or  detention  on  the  part  of  the  other  for  any 
military  expedition  or  other  public  or  private  purpose  what- 
ever, embraced  property  on  land  as  well  as  vessels  and  their 
cargoes — awards  were  made  in  the  cases  of  Hernsheim,  No. 
297;  Bauriedel,  No.  239,  and  Gato,  No.  171,  for  the  detention 
of  tobacco  in  Havana  under  a  decree  of  the  Governor  and 
Captain-General  of  May  16,  1896,  prohibiting  the  exportation 
of  leaf  tobacco  from  the  Provinces  of  Havana  and  Pinar  del 
Rio." 

A  Commission  sitting  on  claims  against  Mexico  might  well 
be  guided  by  the  experiences  and  decisions  of  the  Spanish  Treaty 
Claims  Commission  on  this  subject. 


97 

4- 

Claims  Resulting  from  Seizures  of  the  Revolutionist's 

Resources. 

War  supplies  found  in  territory  under  the  control  of  an 
insurgent  or  revolutionist  army  may  legally  be  confiscated 
by  the  Federal  Government.  Cotton  was  such  a  "war  supply" 
during  the  civil  war  in  the  United  States.  After  the  war  or 
revolution  is  over  claims  for  confiscations  of  this  nature  may 
be  presented  and  will  be  granted  when  it  appears  that  the 
claimant  has  furnished  no  voluntary  aid  to  the  enemy  or 
insurgent  government. ^^ 


Forced  Loans,  Monetary  Decrees,  Bank  Liquidations  and 
Revolutionary  Finance  in  General. 

Revolutionary  finance  in  Mexico  since  the  overthrow  of 
Diaz  presents  an  interesting  if  tragic  story.  Many  and  large 
claims  may  be  expected  from  losses  of  the  kinds  described 
in  this  section.  No  attempt  can  here  be  made  to  study  in 
great  detail  the  operations  employed  by  the  successive  revo- 
lutionary bodies  and  governments  to  finance  themselves  and 
their,  at  times,  desperate  efforts  to  keep  their  heads  above 
water.  Nor  will  it  be  possible  to  discuss  the  exact  extent  to 
which  there  has  become  merged  in  the  liability  of  the  Federal 
Government  the  obligation  to  reimburse  individuals  and  or- 
ganizations for  the  various  types  of  losses  sustained  by 
reason  of  the,  usually  dictatorial  and  confiscatory,  financial 
operations  hereafter  described.  It  will  be  possible  only  in 
merest  outline  to  note  these  losses  and  what  liability  for 
them  there  may  exist. 

Revolutionary  finance  may  be  grouped  under  three 
heads, — forced  loans,  levies  and  confiscations  in  occupied  ter- 
ritory; forced  acceptance  of  fiat  or  depreciated  currency;  and 
forced  liquidations  of  banks. 


11     Young    V.    United    States,   97   U.    S.    39.     See    also,    the   case   of   Maza   & 
Larache  reported  in  6  Moore's  Dig.  895. 


98 

Before  its  ultimate  success  each  revolutionary  movement 
was  characterized,  in  its  financial  operations,  by  very  much 
the  same  procedure.  The  revolution  of  Francisco  I.  Madero 
left  in  its  wake,  in  the  captured  territory,  banks  wholly  or 
partly  ruined.  These  banks  had  been  subjected  to  heavy 
levies,  with  the  proceeds  of  which  Madero  and  his  leaders 
had  paid  their  troops  and  financed  the  revolution.  At  the 
time  Madero  was  overthrown,  his  Congress  was  considering 
means  of  reimbursing  the  despoiled  banks,  but  the  next  revo- 
lution interrupted  any  plans  that  may  have  been  begun  and, 
since  then,  no  attempt  has  been  made  to  satisfy  the  Federal 
liability  to  these  injured  banks.  Injustices  similar  to  the 
Madero  confiscations  were  done  under  each  of  the  successive 
revolutionary  movements  after  his  overthrow.  Huerta's  con- 
fiscations were  possibly  not  as  great,  or  as  obvious,  as  those 
of  Madero,  but  to  him  are  attributable  numerous  interfer- 
ences with  the  monetary  system  which  must  have  done  great 
injury  to  foreigners.  It  should  also  be  noted  that  Huerta 
attem.pted  to  finance  himself  by  means  of  a  foreign  loan, 
whereas  the  other  governmental  heads  attempted  to  do  so  by 
forced  loans,  increased  taxation,  and,  in  some  cases,  by  illegal 
seizure  and  appropriation. 

To  Carranza  and  to  those  who  at  times  aided  him  in  revo- 
lution— Villa,  Zapata,  Urbina  and  others — may  be  attributed 
the  largest  part  of  the  monetary  confiscations  for  which  the 
Government  must  now  find  itself  liable.  Wherever  Carranza 
or  his  agents  overran  territory,  heavy  levies  were  put  upon 
the  banks.  In  some  cases,  as  for  example,  in  Torreon,  all  the 
cash  and  bank  notes  held  by  the  banks  were  seized. 

Some  of  these  levies  were  frank  confiscations,  while  others 
were  so-called  "loans."  In  either  case  the  Government  liability 
is  clear.  Confiscations  will  obviously  form  a  basis  for  inter- 
national claim.  The  rules  in  regard  to  forced  loans  are  also 
quite  clear.  Secretaries  of  State  Fish  and  Cadwalader  in 
1873-74,  when  considering  the  case  of  loans  forced  from 
Ulrich  and  Langstroth,  claimed  that  Articles  8  and  14  of  the 
United  States-Mexican  Treaty  of  1831  had  the  effect  of  ren- 
dering the  Mexican  Government  liable  for  the  repavment  of 


99 

forced  loans.''  But  Mr.  Evarts,  while  Secretary  of  State,  in 
1877,  held  that  this  same  treaty  did  not  really  exempt  United 
States  citizens  from  such  forced  loans.-  Aside  from  treaty 
provisions,  it  is  certainly  better  international  practice  that 
foreigners  should  be  exempted  from  forced  loans. ^ 

Loans  once  forced  from  foreigners  by  a  government  must 
be  repaid  by  that  government.  Mr.  Cadwalader  when  Acting- 
Secretary  of  State,  in  an  instruction  to  Mr.  Foster,  Minister 
to  Mexico,*  applied  this  rule  to  loans  forced  by  insurgents  as 
well  as  Federal  authorities:  "It  may  be  conceded  that  by  the 
public  law  foreigners  in  a  country  in  a  state  of  insurrection 
cannot  expect  to  be  indemnified  for  all  losses  sustained  from 
insurgents  when  the  regular  government  shall  have  been  re- 
stored. The  case  of  a  forced  loan,  however,  is  believed  to  be 
an  exception.  The  meaning  of  the  word  loan  is,  that  the 
money  borrowed  is  to  be  returned.  If  the  borrower  is  a  sov- 
ereign, his  obligation  to  repay  the  amount  is  as  sacred  as  that 
of  a  private  individual.  If  he  is  an  insurgent,  who  for  the 
time  usurps  the  regular  authority,  the  latter  may  justly  be 
expected  to  make  it  good  if  the  loan  was  an  involuntary 
one." 

Let  us  proceed  to  the  second  group  of  revolutionary  finan- 
cial operations — the  forcing  of  acceptance  of  depreciated  or 
fiat  currency.  Not  many  of  the  hysterical  and  unsound  meth- 
ods of  bolstering  up  failing  finances  and  depreciating  cur- 
rency were  overlooked  by  the  revolutionary  leaders  of 
Mexico.  Faced  with  extraordinary  expenses  in  the  conduct 
of  Government  by  reason  of  the  large  armed  forces  continu- 
ally in  the  field,  with  the  revenue  machinery  of  the  Diaz 
regime  sadly  paralyzed  and  with  foreign  credit  suspicious 
and  unready,  these  leaders  were  often  forced  by  circumstances 
to  adopt  unsound  monetary  policies  which  sometimes  tem- 
porarily ameliorated  financial  conditions  but  generally  failed 

1  See  No.  21,  Mans.  Inst.  Mexico  XIX.,  IS,  No.  54  Id.  48  and  No.  141  id. 
121. 

2  No.  4,  85  Mns.  Desp.  to  Consuls  519,  No.  3991,  Mns.  Inst.  Mexico  XIX., 
349,  No.  511  id.  448,  No.  542.  id  478.     See  also,  No.  .568,  For.  Rel.  1879,  772. 

3  See  Mr.  Bayard,  Secretary  of  State  to  Mr.  Bucli,  Minister  to  Peru,  No. 
65,  May  20,  1886,  Mns.   Inst.  Peru,  XVII,  215. 

4  No.   141,  September  21,  1874,  Mns.   Inst.   Mex.   XIX,   121. 


lOO 

from  their  inception  to  do  other  than  aggravate  the  evils 
sought  to  be  cured.  A  detailed  review  of  the  monetary  regula- 
tions which  were  put  into  operation  by  the  successive  govern- 
ments since  Diaz,  and  the  effects  of  these  regulations,  would 
take  a  volume  in  itself.  There  are  many  such  decrees  and 
regulations  and  each  should  be  separately  considered  in  de- 
termining the  validity  of  claims  by  foreigners  presented  for 
losses  occasioned  under  them. 

The  rule  cannot  be  denied  that,  regardless  of  the  degree 
of  liability  to  which  the  Government  of  Mexico  may  be  held 
accountable  by  its  own  citizens,  it  may  be  held  liable  for 
losses  to  foreigners  occasioned  by  such  of  these  decrees  and 
regulations  as  plainly  interfere  with  the  obligation  of  con- 
tract. Flagrant  and  notorious  examples  of  such  an  inter- 
ference with  the  obligation  of  contract  may  be  found  in  the 
history  of  the  Banco  Nacional  de  Mexico  and  the  Banco  de 
Londres  y  Mexico.  At  this  point,  it  is  well  to  remember  that, 
under  the  doctrine  of  the  "El  Triunfo"  case  (discussed  in 
Chapter  II,  Part  B,  Section  i),  claims  by  foreign  stockholders 
in  Mexican  banks  should  receive  diplomatic  aid,  and  are  not 
precluded  because  the  claimants  are  stockholders  in  a  na- 
tional corporation. 

The  issues  of  fiat  currency  are  particularly  interesting. 
With  the  advent  of  Carranzista  fiat  paper  currency  began  the 
most  depressing  period  of  finance  in  the  revolutionary  years. 
Early  in  1913  Carranza  had  issued  his  first  paper  money, 
called  the  "Monclova."  The  public  was  forced  under  ex- 
treme penalties,  and  with  the  aid  of  troops,  to  accept  in 
liquidation  of  debts  and  as  full  legal  tender  this  fiat  money. 

Shortly  after  the  arrival  of  the  Constitutionalist  Army  at 
Tampico,  there  appeared  the  "Ejercito  Constitucionalista" 
issue  of  paper  currency,  and  when  Carranza  triumphantly  en- 
tered Mexico  City  he  brought  this  currency  with  him.  Worse 
than  this,  he  established  his  printing  presses  in  Mexico  City 
and  a  continuous  stream  of  the  new  paper  flowed  from 
these  presses.  Gresham's  Law  immediately  came  into  opera- 
tion. Metal  currency,  even  the  smaller  coins,  and  bank 
notes,    disappeared,    and    the    worthless    paper    money    was 


lOI 

everywhere.  The  soldier  forced  the  money  on  the  shop- 
keeper, the  shopkeeper  paid  the  wholesaler  with  the  same 
money,  the  wholesaler  took  it  to  the  banks  and  the  banks 
turned  it  back  to  the  people. 

When  Villa  dispossessed  Carranza  for  a  short  time  in 
Mexico  City,  the  capital  was  during  that  period  flooded  with 
Villa  issues  (dos  caras  sabanas),  while  Carranza  at  Vera 
Cruz  kept  his  presses  busily  at  work  turning  out  millions  of 
"Vera-Cruzanas,"  with  which  he  deluged  the  capital  upon 
his  re-entry.  The  Villa  money  was  declared  void  and  those 
who  were  unfortunate  enough  to  be  caught  with  quantities  of 
it  suffered  loss. 

It  is  of  some  importance  to  point  out  that  the  mortgage 
banks  in  Mexico,  in  particular,  were  subjected  to  great  losses 
through  being  forced  to  accept  depreciated  or  fiat  currency. 
These  banks  had  loaned  large  sums  on  mortgage,  to  be  re- 
paid, under  the  terms  of  the  mortgages,  in  gold.  The  losses 
occasioned  the  mortgage  banks  when  the  Government  de- 
creed that  all  mortgage  loans,  despite  the  fact  that  the 
mortgagors  had  contracted  to  repay  in  gold,  might  legally 
be  repaid  in  paper,  were  consequently  enormous.  This  seems 
to  be  a  very  clear  interference  with  the  obligation  of  con- 
tract. Certainly  when  foreign  banks  were  involved  in  these 
losses,  claims  arose  in  their  favor  on  the  ground  that  the 
Government  had  interfered  with  their  fundamental  contract 
rights. 

There  were  some  two  hundred  issues,  large  and  small,  of 
fiat  paper  currency  during  the  revolutionary  period,  the  total 
value  probably  considerably  exceeding  one  billion  pesos.  All 
of  these  issues  took  about  the  same  course.  Forced  on  the 
public  and  having  nothing  behind  them,  they  depreciated  so 
rapidly  that  Carranza  finally  found  himself  forced  to  turn  to 
some  other  field  of  finance  more  promising  than  the  printing 
of  worthless  paper. 

When  the  paper  currency  period  came  to  an  end  and  the 
country  returned  to  a  metallic  currency,  the  banks  held  in 
their  vaults  the  greater  part  of  the  coin  and  bullion  in  Mex- 
ico.    Carranza,  sorely  in  need  of  funds  and  no  longer  able  to 


I02 

pay  his  soldiers  in  depreciated  or  fiat  paper,  Legan  a  cam- 
paign against  the  banks  which  marlced  the  last  stage  in  the 
collapse  of  financial  security  in  the  Republic.  The  purpose  of 
this  campaign  was  ostensibly  to  rectify  the  unhappy  financial 
situation,  but  was  in  reality  ill-concealed  confiscation  of  the 
metallic  funds  of  the  banks,  often  resulting  in  their  complete 
destruction.  The  condition  of  the  Mexican  banks  of  issue 
whose  reserves  had  been  greatly  depleted  during  the  turmoil 
following  the  overthrow  of  Diaz,  offered  an  opportunity  to 
Carranza  that  he  soon  took  advantage  of.  The  old  Banking 
Law  of  Mexico  provided  that  banks  of  issue  must  keep  their 
metallic  reserve  up  to  an  amount  equal  to  all  their  bills  in 
circulation.  All  or  most  of  these  banks  had  been  unable  to 
maintain  this  reserve,  whether  by  reason  of  governmental 
loans  or  assessments  or  whatnot,  but  were  nevertheless  sol- 
vent and  fundamentall}^  in  sound  financial  condition.  Under 
a  short  period  of  normal  conditions,  they  would  have  been 
able  to  replenish  their  reserves  and  to  comply  with  the  old 
law,  which  they  had  been  prevented  from  satisfying  princi- 
pally by  reason  of  the  national  emergency.  Carranza  seeing 
in  this  situation  the  possibility  of  replenishing  his  treasury, 
under  C!>lcr  of  legal  proceedings,  on  September  15,  1916,  as 
First  Chief  of  the  Constitutionalist  Army  of  the  Republic  of 
Mexico,  issued  a  decree  declaring  the  abrogation  of  all  the 
banking  laws  of  Mexico,  of  the  General  Law  of  Credit  Institu- 
tions and  of  the  laws  authorizing  concessions  to  banks  of 
issue,  and  abrogating  also  the  charters  of  all  banks  of  issue 
organized  or  existing  under  the  Mexican  law.  The  decree 
then  provided  that  all  banks  of  issue  be  given  sixty  days 
within  which  to  increase  their  metallic  reserves  to  an  amount 
equal  to  their  l:)ills  in  circulation.  After  the  sixty-day  period 
a  Board  of  Sequestration  v/as  to  be  appointed  by  the  Depart- 
ment of  the  Treasury,  in  the  interests  of  the  conservation  of 
the  banks  only,  which  Board  v/as  to  act  as  a  commission  to 
conserve  the  metallic  specie  of  the  banks  where  it  had  not 
been  kept  up  to  the  required  figure. 

On    December    14,    1916,    Carranza    issued   another   decree 
declaring  all   banks  of  issue,   which   had  not  brought  their  me- 


I03 

tallic    reserves    up    to   the    required   standard    within    the    sixty- 
day  period,   lu  ue  in  a  state  of  liquidation. 

On  April  4,  1917,  Carranza  created  by  decree  the  "Com- 
ision  Moneiaiia,"  a  commission  to  reorganize  the  circulation 
of  fiduciary  coin  in  Mexico. 

By  decree  of  April  6,  1917,  Carranza  ordered  that  the 
Comision  Monetaria  was  to  liquidate  the  banks  of  issue  in 
accordance  with  the  above-mentioned  decrees. 

It  is  important  to  observe  that  it  was  largely  because  of 
the  control  of  the  Department  of  Finance,  through  the  Board 
of  Sequestration  and  the  Comision  Monetaria,  that  most  of 
the  banks  were  unable  to  retire  their  bills  in  circulation  and 
to  build  up  their  reserves.  Furthermore,  monies  were  con- 
tinually withdrawn  from  the  banks  under  various  pretexts  by 
the  Boards  and  the  Comision  and  large  sums  never  repaid. 

In  most  cases  no  liquidation  proceedings  were  inaugurated 
beyond  the  taking  over  of  physical  possession  of  the  banks 
and  their  assets  by  the  Comision.  In  many  instances  the 
officers  of  banks  were  forced  by  imprisonment  and  intimida- 
tion to  turn  over  to  the  Mexican  Government  parts  or  the 
v.hole  of  the  metallic  reserves  of  their  respective  banks,  these 
monies  being  used  not  to  conserve  the  reserves  and  to  liqui- 
date, but  for  the  general  administration  expenses  of  the  gov- 
ernment and  to  pay  the  armies.  Another  frequent  procedure 
was  to  demand,  on  order  of  Carranza,  that  the  bank  officials 
turn  over  to  the  mint  of  the  Republic  for  immediate  coinage 
the  bars  of  silver  and  gold  held  in  the  bank  vaults  as  part  of 
the  metallic  reserve.  When  this  was  done,  generally  only 
a  small  part  of  the  coin  specie  was  returned  to  the  banks. 

In  spite  of  the  control  of  the  banks  by  the  Department  of 
Finance,  they  were  forced  from  time  to  time  to  make  so- 
called  leans  to  the  government.  In  most  instances  these 
loans  consisted  of  forcible  extractions  from  the  vaults  of 
the  banks,  without  provision  for  repayment. 

These  exactions  of  forced  "loans"  were  in  clear  contra- 
vention of  good  international  practice.  They  might  be  sup- 
ported as  necessary  emergency  measures,  but  the  methods 
tnnployed  in   executing  these  measures  withdrew  from  them 


I04 

any  possible  sanction  that  international  law  might  have  given 
them.  Furthermore,  it  is  clear  that  most  of  these  exactions 
must  be  considered,  from  an  international  law  viewpoint,  as 
being  not  in  the  nature  of  extraordinary  taxes,  but  as  forced 
loans,  and  the  obligation  of  the  Mexican  Government  to  make 
repayment  for  all  such  "loans"  is  unquestionably  absolute. 

On  January  31,  1921,  President  Obregon  issued  a  "Decree 
Regulating  the  Return  and  Liquidation  of  Suspended  Banks." 
This  decree  provided  in  Art.   i  as  follows: 

"Art.  I.  The  banks  which  were  declared  to  be  in  liquida- 
tion, by  virtue  of  the  decree  of  December  14th,  1916,  shall 
recover  their  judicial  personality  and  shall  be  returned  to 
their  legitimate  representatives  under  the  terms  and  condi- 
tions of  this  law." 

The  procedure  for  the  return  of  the  suspended  banks  is  set 
forth  in  the  decree  in  detail.  It  is  probable  that  many  of  the 
banks  which  have  been  out  of  operation  since  1916  will  take 
advantage  of  the  decree  and  attempt  to  resume  business ;  several 
of  the  larger  banks  have  already  taken  advantage  of  this  decree. 
From  the  text  of  the  decree  it  would  seem  that  the  same  does 
not  operate  to  destroy  any  claims  the  banks  may  have  against 
the  Government  for  losses  sustained  during:  the  revolutions. 


Damages  for  Wanton  and  Unlawful  Acts. 

A  nation  is  now  undoubtedly  held  internationally  responsible 
for  damages  to  aliens  occasioned  by  the  wanton  and  unlawful  acts 
of  authorities  or  military  forces. ^ 

"We  do  not,  at  the  present  day,  often  hear,  when  a  town  is 
carried  by  assault,  that  the  garrison  is  put  to  the  sword  in  cold 


1  Mr.  Seward,  Sec.  of  State,  to  Mr.  Dayton,  Mar.  1.3,  186.3,  Ms.  Inst. 
Prance  XVI.,  34.5;  Mr.  Freliimliuysen.  Sec.  of  State,  to  Mr.  Logan,  June  7, 
1883,  Min.  to  Chile,  June  7,  iss:;.  For.  Rel.  1883,  107.  Mr.  Bayard,  Sec.  of 
State,  to  Mr.  Hall,  May  27,  JS.sti,  MS.  Inst.  Cent.  Am.  XVIII.,  615.  Andrew- 
Moss  V.  Chile.  No.  25.  LTnited  States  and  Chilean  Claims  Commission,  1901. 
See  .Mr.  Blaiue,  Sec.  of  State,  to  Mr.  Christiancy,  No.  1.5.3,  June  21,  1881,  Ms. 
Inst.  Peru,  XVI.,  .501.  The  Commission  disallowed  a  claim  for  the  loss  of 
property  by  the  burning  of  Chorillos  by  the  Chilean  forces,  the  l>urning 
resulting  from  the  taking  of  the  place  by  storm.  Peter  Bacigalupi  v.  Chile, 
No.   42,   United   States   and   Chilean   Claims   Commission,    1901. 


I05 

blood,  on  the  plea  that  they  have  no  right  to  quarter.  Such  things 
are  no  longer  approved  or  countenanced  by  civilized  nations. 
But  we  sometimes  hear  of  a  captured  town  being  sacked,  and  the 
houses  of  the  inhabitants  being  plundered,  on  the  plea  that  it  was 
impossible  for  the  general  to  restrain  his  soldiery  in  the  con- 
fusion and  excitement  of  storming  the  place ;  and  under  that 
softer  name  of  plunder  it  has  sometimes  been  attempted  to  veil 
'all  crimes  which  man,  in  his  worst  excesses,  can  commit ;  horrors 
so  atrocious  that  their  very  atrocity  preserves  them  from  our  full 
execration,  because  it  makes  it  impossible  to  describe  them.'  It  is 
true  that  soldiers  sometimes  commit  excesses  which  their  officers 
can  not  prevent ;  but,  in  general,  a  commanding  officer  is  respon- 
sible for  the  acts  of  those  under  his  orders.  Unless  he  can  con- 
trol his  soldiers,  he  is  unfit  to  command  them.  The  most  atro- 
cious crimes  in  war,  however,  are  usually  committed  by  militia 
and  volunteers  suddenly  raised  from  the  population  of  large 
cities,  and  sent  into  the  field  before  the  general  has  time  or  op- 
portunity to  reduce  them  to  order  and  discipline.  In  such  cases 
the  responsibility  of  their  crimes  rests  upon  the  state  which  em- 
ploys them,  rather  than  upon  the  general  who^  is.  perhaps,  un- 
willingly, obliged  to  use  them."^  However,  when  no  officers  or 
officials  of  the  government  are  in  any  way  connected  or  identi- 
fied with  the  transaction,  no  international  liability  ari'^es.-"' 

The  Spanish  Treaties  Claims  Commission  held  that  Spain  was 
entitled  in  endeavoring  to  repress  the  Cuban  revolution  to  adopt 
"such  war  measures  for  the  recovery  of  her  authority  as  are  sanc- 
tioned by  the  rules  and  usages  of  international  warfare."  but  that 
if  "it  be  alleged  and  proved  in  any  particular  case  that  the  acts 
of  the  Spanish  authorities  or  soldiers  were  contrary  to  such  rules 
and  usages,  Spain  will  be  held  liable  in  that  case."* 


2  Halleck's  International  L.iw  and  Laws  of  War  (San  Francisco,  1861, 
Sec.  22,  p.  442),  citing  Kent's  Commentaries,  Vattel's  Droit  de  Gens,  and  other 
authorities. 

3  Mr.  Fish,  Sec.  of  State  to  Count  Corti,  Italian  min.  Dec.  9,  1872,  MS. 
Notes  to   Italy,   VII.,    I."i0;    Moore.    Int.    Arbitrations.    IV.,   402'.». 

4  Statement  by  the  president  of  the  Spanish  Treaty  Claims  Commis- 
sion, Mr.  William  E.  Chandler,  Nov.  24.  1902,  concurred  in  by  Commissioners 
Diekema  and  Wood.  (S.  Doc.  2^^.  58  Cong.  2  sess.)  Commissioners  Maury  and 
Chambers  dissented  for  the  rc.ison  thnt  even  though  it  was  correct  as  an 
abstract  proposition,  it  tended  to  qualify  the  liability  of  the  TTnited  States 
under  Art.  VII,  of  the  treaty  <f  peace  with  Spain  of  De.-.  10.  ISOS.  (S.  D'-.c. 
2.'.  .58  Cong.  2  sess.  10,  12.)  The  foregoing  propositions  were  repeated,  under 
the  numbers  .">  and  9,  in  a  statement  issued  by  the  commission  on  April  28, 
1903.     (Id.  6,  7.) 


io6 

When  the  claims  against  Mexico  are  presented,  it  will  prob- 
ably appear  that  many  of  them  are  based  on  the  wanton  acts  of 
military  forces.  The  Federal  Anny  has  always  been  principally 
composed  of  uneducated  and  not  entirely  civilized  Indians,  and 
largely  of  former  bandits  inveigled  into  the  Federal  service,  as 
much,  in  some  cases,  to  keep  them  out  of  mischief  as  for  their 
military  value.  In  the  execution  of  their  military  purposes,  sol- 
diers of  this  type  are  very  likely  to  be  only  semi-disciplined  and 
to  indulge  in  excesses  and  unnecessary  wanton  acts.  Each  suc- 
cessive revolutionary  movement  has  called  to  its  standards  a  mis- 
cellany of  banditti,  discontents  and  malefactors.  These  conglom- 
erate forces  have  represented  all  stages  of  civilization  and  moral- 
ity, consequently,  inasmuch  as  liability  for  the  acts  of  these 
revolutionary  forces  became  merged  in  the  Federal  liability  upon 
the  success  of  the  particular  revolution  which  they  assisted,  the 
Federal  liability  is  likely  to  be  extensive. 

7. 

Railroad  Claims. 

Three  classes  of  railroad  claims  may  be  anticipated:  (i)  those 
arising  out  of  the  guaranty  by  the  Mexican  Government  of  rail- 
road bonds  and  securities.  These  claims  are  considered  else- 
where herein.     (Chapter  IV-B), 

(2)  Claims  arising  out  of  the  operation  of  the  roads  after 
their  seizure  by  the  Carranza  Government. 

(3)  Claims  based  on  the  destruction  of  railroad  properties. 

The  second  and  third  classes  of  claims  are  covered  by  pro- 
visions of  the  Mexican  Law. 

Acting  entirely  within  its  rights,  the  Mexican  Government, 
during  the  revolution,  took  over  the  management  and  operation  of 
privately-owned  railroads.  Chapter  VIII  of  the  Railroad  Law 
of  Mexico  is  entitled,  "Rights  Reserved  to  the  Nation."  It  says 
in  part  as  follows : 

"Art.    145.  The      Nation     will     have     the     following 
rights : 


107 

"X.  The  federal  authorities  are  entitled,  in  case,  in 
their  opinion,  the  defense  of  the  country  requires  it,  to 
make  requisitions  on  the  railroads,  their  personnel  and 
all  their  operating  material  and  to  dispose  of  them  as  they 
may  consider  advisable. 

"In  this  case  the  Nation  shall  indemnify  the  railroad 
companies.  If  no  agreement  is  reached  as  to  the  amount 
of  the  indemnification,  the  latter  shall  be  based  on  the 
average  gross  earnings  in  the  last  five  years,  plus  ten  per 
cent,  all  expenses  being  borne  by  the  company. 

"If  only  a  part  of  the  material  is  required  the  pro- 
visions of  paragraph  IV  of  this  article  will  be  observed 

"XI.  In  the  event  of  war  or  of  extraordinary  circum- 
stances, the  executive  may  take  measures  to  render  un- 
ser\iceable  either  the  whole  or  part  of  the  road,  also  the 
bridges,  telegraph  lines  and  signals  forming  part  of  the 
road. 

"^^'hat  may  ha\-e  been  destroyed  shall  be  replaced  at 
the  cost  of  the  Nation,  as  soon  as  the  Nation's  interests 
allow  of  it. 

"XII.  In  case  the  executive  orders  the  suspension  of 
the  service,  for  the  sake  of  the  country's  defense  or  the 
public  peace,  it  may  also  order  that  all  the  rolling  stock 
and  any  other  material  shall  be  removed. 

"In  such  cases  the  war  department  will  determine  the 
places  to  which  said  material  is  to  be  taken." 

It  will  be  observed  that  this  article  clearly  gives  the  Mexican 
Government  the  right  to  take  over  the  roads  in  cases  of  public 
emergency.  That  the  existence  of  revolution  presents  a  public 
emergency  is  obvious.  It  will  further  be  noticed  that  the  second 
paragraph  of  section  X  provides  specific  indemnification  for  the 
owners  of  the  road.  The  second  paragraph  of  section  XI  provid- 
ing for  the  replacement  at  the  cost  of  the  Nation  of  property 
destroyed  under  governmental  direction  in  times  of  national 
stress,  is  peculiarly  worded,  inasmuch  as  it  provides  for  replace- 
ment "as  soon  as  the  Nation's  interests  allow  of  it."  Tlie  word- 
ing of  this  phra>;e  might  permit  the  Government  to  delay  the  date 
of  reparation  until  it  has  sufficiently  recovered  from  the  National 
emergency  to  make  provision  for  such  reparation.  The  obliga- 
tion, however,  to  replace  is  absolute. 


io8 

Claims  based  simply  upon  injuries  to  railroad  properties  oc- 
casioned by  the  acts  of  revolutionaries  or  bandits,  are  treated 
elsewhere.  Probably  only  when  there  is  present  wantonness, 
maliciousness,  negligence  or  similar  factors  will  liability  fall  upon 
the  Government. 

There  is  nothing  in  the  nature  of  claims  under  classes  (2) 
and  (3)  noted  above  which  would,  without  a  denial  of  justice, 
bring  them  into  the  group  of  those  for  which  diplomatic  inter- 
position would  be  possible.  As  above  indicated,  the  Mexican  law 
makes  ample  provision  for  reparation  and  compensation  and  the 
private  owners  would  undoubtedly  have  to  seek  their  local  rem- 
edies before  they  could  obtain  the  aid  of  their  own  governments, 
unless  Mexico  consents  to  include  such  claims  in  an  eventual 
arbitration. 

8 

Federal  Liadility  for  the  Acts  of  Insurgents  and  Revolu- 
tionaries. 

If  the  insurgents  eventually  become  successful  in  their  move- 
ment, liability  for  their  acts  will  be  merged  in  the  general  liabil- 
ity of  the  Government. 1  It  is  the  liability  of  the  nation  for  the 
acts  of  unsuccessful  insurgents  that  will  be  here  considered. 

"The  general  rule  is  that  a  sovereign  is  not  ordinarily  respon- 
sible to  alien  residents  for  injuries  they  receive  on  its  territory 
from  belligerent  action  or  from  insurgents  whom  he  can  not  con- 
trol."- "They  are  not  entitled  to  greater  privileges  or  immunities 
than  the  other  inhabitants  in  the  insurrectionary  district.  *  *  * 
By  voluntarily  remaining  in  a  country  in  a  state  of  civil  war  they 
must  be  held  to  have  been  willing  to  accept  the  risks,  as  well  as 
the  advantages  of  that  domicile.""^ 

The  government  is  not  responsible  for  the  acts  of  insurgents 
or  revolutionaries  when  it  has  given  all  the  protection  in  its 
power,  is  not  itself  culpable,  and  the  revolution  has  gone  beyond 


1  This  subject   is   discussed   in   Chapter   I-C. 

2  1  Amer.  Journal  of  Int.  Law  35;  6  Moore's  Dig.,  pp.  885,  886.     See  also, 
Wharton,    pp.   577,   578;    G   Moore's   Dig.,    Sees.    1032-1049. 

3  Secy.    Sewnrd    to    Count    \\'ydenliru(h    in    1805;    6    Moore's    Dig.,    p.    S^^o; 
1  Amer.   Jour.   Int.   Law,  36. 


109 

control.*  There  is  no  federal  liability  when  the  revolution  has 
reached  the  state  where  the  whole  government  forces  are  needed 
to  combat  it.  The  United  States  disclaimed  liability  for  the  acts 
of  the  confederacy  in  part  on  this  ground.^ 

Recognition  of  the  insurgents  as  belligerents  relieves  the  Fed- 
eral government  of  responsibility  for  the  acts  of  the  insurgents 
against  nationals  of  the  recognizing  nation.  This  was  true  in  the 
case  of  the  recognition  by  England  and  France  of  the  belliger- 
ent status  of  the  confederacy.^ 

A  state  may  avoid  hability  for  the  acts  of  insurgents  within 
its  borders  by  recognizing  their  belligerent  status. 

Aliens  cannot  claim  the  protection  of  a  state  if  they  enter  a 
part  of  the  territory  notoriously  in  a  condition  of  upheaval,  or 
when  the  government  has  decreed  that  they  do  so  at  their  own 
peril."^  But  "the  mere  'revolutionary  state'  of  a  part  of  Mexico 
can  not  be  accepted  by  the  United  States  as  a  defense  to  a  claim 
on  Mexico  for  injuries  inflicted  on  citizens  of  the  United  States 
in  Mexico  in  violation  of  treaty  engagements."^ 

President  Jackson  in  his  annual  message,  December  7,  1835'** 
said :  "Unfortunately,  many  of  the  nations  of  this  hemisphere 
are  still  self-tormented  by  domestic  dissensions.  Revolution  suc- 
ceeds revolution ;  injuries  are  committed  upon  foreigners  engaged 
in  lawful  pursuits.  Much  time  elapses  before  a  government  suffi- 
ciently stable  is  erected  to  justify  expectation  of  redress.  Min- 
isters are  sent  and  received,  and  before  the  discussions  of  past 


4  Moore's  Int.  Arbi..  V,  4615-17;  212  MS.  Dom.  Let.  450;  Mr.  Seward, 
Sec.  of  State,  July  9,  1S68;  79  MS.  Dom.  Let.  69;  Mr.  Olney,  U.  S.  Sec.  of 
State,  Jan.  29,  1896,  to  Mr.  Thompson,  Min.  to  Brazil,  Ms.  Inst.  Brazil,  XVIII., 
171;  Mr.  Olney  to  the  President,  Dec.  7,  1896,  For.  Rel.  1896,  LXXXII.  and 
LXXXV. ;  Mr.  Uhl,  Acting  Sec.  of  State  to  U.  S.  Vice-Counsel  General  at 
Havana,  July  1,  1895,   For.  Rel.  1895,   II.,  1216. 

5  Moore's  Int.  Arbi.,   II.,  1622,  III.,  2982-85. 

6  See  Mr.  Adams,  Min.  to  England,  to  Mr.  Seward,  Sec.  of  State  of 
U.  S.,  June  14,  1861;  Diplomatic  Correspondence  1861,  87,  89;  and  Mr.  Seward. 
Sec.  of  State  to  Mr.  Dayton,  Min.  to  France,  Jan.  12,  1864,  Dip.  Cor.  1864, 
HI.,   17;   6  Moore's   Dig.   956,  9.57. 

7  Mr.  Davis,  Acting  Sec.  of  State,  to  Mr.  Markbreit,  Min.  to  Bolivia, 
No.  55,  July  7,  1871,  MS.  Inst.  Bolivia,  I.,  145.  In  this  connection  see  Chapter 
V,  Part  C,  Section  10.  See  also  the  case  of  the  "Seven  Mexican  Shepherds" 
cited  in  Chapter   IV,   Part  H,   Section  2. 

8  Mr.  McLane,  Sec.  of  State,  to  Mr.  Butler,  Min.  to  Mexico,  June  20, 
1834,  MS.   Inst.   Mex.   XV.,  27;   Wharton    Int.   Law   Digest   II.,  576,   Sec.   22.3. 

9  Richardson's  Messages,  III.,  147,  151. 


no 

injuries  are  fairly  begun  fresh  troubles  arise;  but  too  frequently 
new  injuries  are  added  to  the  old,  to  be  discussed  together  with 
the  existing  government  after  it  has  proved  its  ability  to  sustain 
the  as-aults  niade  upon  it,  or  with  its  successor,  if  overthrown. 
If  this  unhappy  condition  of  things  continue  much  longer,  other 
nations  will  be  under  the  painful  necessity  of  deciding  whether 
justice  to  their  sufifering  citizens  does  not  require  a  prompt  re- 
dress of  injuries  by  their  own  government  competent  and  en- 
during enough  to  discuss  and  to  make  satisfaction  for  them."^*' 

It  is  reasonably  well  settled  that  liability  will  arise  where  the 
injury  violates  a  trerty  right  and  there  is  no  other  form  of  re- 
dress;  where  there  has  been  undue  discrimination  against  for- 
eigners in  adjudicating  or  allowing  claims;  where  there  has  been 
an  evident  deni:il  or  palpable  violation  of  justice;  and,  perhaos, 
even  where  international  law  and  the  rules  of  civilized  warfare 
are  seriously  violated. ^^ 

The  liability  of  a  state  is  undeniable  where  it  has  been  negli- 
gent or  has  lacked  due  diligence}-  The  following  excerpt  from 
Samuel  B.  Crandall  on  ''Law  Applied  by  Spanish  Treaty  Claims 
Commission, "i^  states  clearly  the  rules  of  due  diligence  applied 
by  that  Commission : 

"  'The  Commission  having  previously  held  that  the  insurrec- 
tion from  the  first,  as  a  whole,  went  beyond  the  control  of  Spain, 
and  it  appearing  and  being  conceded  by  the  claimant  in  this  case 


10  Richardson's  Messages,   III,  147,  151. 

11  See  article  by  Amos  S.  Hershey,  "Calvo  and  Drago  Doctrines,"  1  A.  J. 
I.   L.   36. 

12  Mr.  Olney,  Sec.  of  State,  to  Messrs.  Lauman  &  Kemp.  Jan.  13,  1896, 
207  MS.  Dom.  Let.  146;  Ralston,  Umpire,  case  of  Sambiaggio,  Italian-Venez- 
uelan Mixed  Commission,  protocol  of  February  13,  1903,  Ralston's  Report  666; 
case  of  Guastini,  id.  730,  747;  and  other  cases,  id.  753,  769,  810,  816.  This 
ruling  was  followed  by  Duffield,  Umpire,  case  of  Van  Dissel  &  Co.,  German- 
Venezuelan  Mixed  Commission,  protocol  of  February  13,  1903,  Ralston's  Re- 
port, 565,  573;  also  by  Plumley,  Umpire,  case  of  Aroa  Mines  Co.  (Limited), 
British-Venezuelan  Mixed  Commission,  protocol  of  February  13,  1903,  Ral- 
ston's Report  344,  350 ;  and  case  of  HenriQuez,  Netherlands-Venezuelan  Mixed 
Commission,  protocol  of  Feb.  28,  1903,  Ralston's  Report,  896;  and  also  in 
another  case,  id.  903.  It  was  also  held  by  the  American-Venezuelan  Mixed 
Commission,  under  the  protocol  of  Feb.  17,  1903,  in  Jarvis'  case,  in  an  opinion 
delivered  by  Bainbrldge,  the  American  commissioner,  that  the  Venezuelan 
Government  could  not  be  held  liable  for  the  paymemt  of  bonds  issued  by 
unsuccessful  revolutionists  in  payment  of  services  rendered  them.  Ralston's 
Report,   145;   6  Moore's   Dig.   972. 

13  IV.,   A.   J.    I.    L.   818. 


Ill 

that  the  Spanish  troops  did  not  fail  to  use  due  diligence  on  the 
15th  of  December  at  Hormiguero,  it  is  questionable  whether  the 
Commission  is  authorized  to  review  the  military  situations  and 
operations  at  the  various  times  and  places  mentioned,  so  remote 
were  they  from  the  15th  of  December  and  Hormiguero,  and  to 
condemn  the  plans,  acts,  omissions  of  the  military  command- 
ers as  proving  such  a  lack  of  due  diligence  on  the  part  of  the 
Spanish  authorities  as  to  make  Spain  liable  for  the  damages  done 
by  the  insurgents  at  that  time  and  place.  At  all  events,  it  is  cer- 
tain that  no  legal  precedents  have  been  found  which  would  in  our 
opinion,  justify  the  Commission  in  entering  upon  such  review  and 
condemnation.' 

"Under  this  ruling  of  the  Commission,  in  order  to  establish 
liability  of  Spain  for  damages  by  insurgents  it  was  necessary  to 
prove  the  failure  of  the  Spanish  authorities  at  the  time  and  place 
to  exercise  due  diligence  in  affording  protection.  A  large  amount 
was  claimed,  before  the  Commission  for  the  burning  of  cane  by 
the  insurgents.  Early  in  the  insurrection  the  general  in  charge 
of  the  Cuban  forces,  with  the  twofold  purpose  of  depriving  the 
Spanish  Government  of  revenue  and  of  compelling,  by  removing 
the  possibility  of  employment,  the  colonos  and  laborers  on  the 
sugar  plantations  to  join  the  Cuban  forces,  ordered  the  burning 
of  cane  fields.  The  order  was  subsequently  limited  to  those  es- 
tates which  attempted  to  grind.  The  evidence  taken  in  the  cases 
before  the  Commission  clearly  established  as  a  general  proposi- 
tion the  impossibility  of  protecting,  by  forces  of  the  regular  army, 
the  extensive  cane  fields  throughout  the  Island.  In  only  one  case, 
that  of  the  Central  Tuinucu  Sugar  Company,  No.  240,  was  re- 
covery for  the  burning  of  cane  fields  by  the  insurgents  granted. 
The  facts  in  this  case  were  peculiar.  The  Commission  found  in 
this  case  evidence  to  show  that  the  insurgents  threatened  to  de- 
stroy the  property  if  an  attempt  at  grinding  was  made,  that  the 
Spanish  authorities  ordered  the  claimant  to  proceed  with  the 
grinding  and  promised  protection.  While  a  Spanish  force  of  350 
men  was  erecting  fortifications  on  the  batey,  the  insurgents  be- 
gan burning  the  cane  fields  of  the  estate  and  continued  burning 
them  for  several  days,  until  the  fields  were  nearly  all  burned. 
The  Spanish  forces  remained  wi.hin  the  bate}    and  made  no  ef- 


112 

fort  to  prevent  the  burning-.  It  was  contended  by  the  defendant 
that  it  was  a  question  of  mihtary  discretion,  which  could  not  be 
reviewed  by  the  Commission,  on  the  part  of  the  commanding'  offi- 
cer whether  he  should  divide  his  forces  in  order  to  prevent  the 
burning  of  the  cane,  and  possibly  so  weaken  the  force  on  the 
batey  as  to  enable  the  insurgents  to  burn  the  mill  or  whether  he 
should  keep  his  forces  united  for  the  protection  of  the  buildings 
of  the  batey.  The  Commission  held,  however,  that  the  Spanish 
authorities  were  negligent  and  made  an  award  accordingly. 

"In  the  case  of  Rodriguez,  No.  479,  an  award  was  made  for 
the  destruction  of  household  goods  by  the  insurgents,  the  Span- 
ish authorities  having  arbitrarily  refused  the  claimant  permission 
to  remove  them  to  a  place  of  safety.  So  also  in  the  case  of 
Thorne,  No.  248,  an  award  was  made  for  a  quantity  of  tobacco 
burned  by  the  insurgents,  it  appearing  to  the  Commission  that 
the  claimant  had  been  prevented  by  the  Spanish  authorities  from 
removing  it  to  a  place  of  safety.  In  reporting  these  cases  the 
Commission  says : 

"  'In  neither  of  the  above-cited  cases  was  it  shown  that  by 
reasonable  diligence  the  Spanish  Government  could  have  pre- 
vented the  destruction  of  the  buildings,  but  having  unreasonably 
refused  to  permit  the  removal  of  the  household  goods  in  the  one 
case,  and  having  actively  and  without  warrant  interrupted  and 
prevented  the  renioval  of  the  tobacco  in  the  other  case,  awards 
were  made  the  respective  claimants,  the  Commission  feeling  that 
it  was  justified  under  the  broad  jurisdiction  granted  it  by  statute 
to  disregard  the  strict  application  to  these  cases  of  the  common- 
law  principles  which,  if  applied,  would  perhaps  have  prevented 
a  recovery  and  defeated  what  were  regarded  by  the  Commission 
as  meritorious  claims.'  "i* 

Mr.  Bayard,  then  Secretary  of  State  of  the  United  States,  in 
a  communication  to  Mr.  Sutphen,  on  January  6,  1888,^^  in  dis- 
cussing the  rules  of  due  diligence  applicable  to  this  subject,  states 
that  they  must  be  held  to  vary  with  the  nature  of  the  insurrec- 
tion, the  territory  involved  and  the  situation,  and  quoted  Mr. 
Fish  in  his  instructions  to  Mr.  Foster  of  August  15,  1873,  when 


14  Vol.  IV.,  Amer.  Journ.  Int.  Law,  818. 

15  166  MS.  Dom.   Let.  509. 


113 

discussing  the  United  States  claims  against  Mexico  for  injuries 
sustained  from  insurrectionary  violence,  as  saying  that  the  rule 
sustaining  such  claims  "should  not  always  apply  to  persons  domi- 
ciled in  a  country  and  rarely  to  such  as  may  visit  a  region  notori- 
ously in  a  state  of  civil  war." 

Mr.  Bayard  cited  several  other  important  precedents — cases 
in  which  the  United  States  had  disclaimed  liability,  or  refused  to 
hold  another  nation  liable,  on  the  ground  that  sufficient  diligence 
had  been  employed,  or  that  the  claimant  had  voluntarily  sub- 
jected himself  to  undue  risk.  Moreover,  he  pressed  the  theory 
that  the  continued  maintenance  of  an  insurrection  is  "prima  facie 
proof  of  ms  major  which  throws  upon  the  party  alleging  particu- 
lar negligence  the  burden  of  proving  it,"  continuing  as  follows : 

"Nor  can  the  Department  refuse  to  apply  to  citizens  of  the 
United  States  visiting  foreign  lands  where  insurrections  for  the 
time  prevail,  or  the  local  government  is  powerless  to  suppress 
sudden  tumults,  the  rule  that  it  applied  to  foreigners  who  visited 
portions  of  our  territory  where  insurrections  for  the  time  pre- 
vailed, or  when  the  local  government  was  without  the  power  to 
repress  sudden  tumults.  Spain  can  not  be  held  to  a  greater  de- 
gree of  liability  to  foreigners  for  losses  incurred  by  reason  of 
lawlessness  in  Cuba,  than  is  the  United  States  for  similar  dis- 
orders within  its  jurisdiction  ;  nor  can  the  United  States  claim 
for  its  citizens  residing  voluntarily  in  foreign  lands,  immunities 
which  it  will  not  concede  when  claimed  against  itself.  We  hold 
that  foreigners  who  resort  to  localities  which  are  the  scenes  of 
lawless  disorder  in  this  country  do  so  at  their  own  risk,  and 
must  apply  the  same  rule  to  our  own  citizens  in  foreign  lands." 


114 

H. 

ACTS   OF   PRIVATE  PERSONS. 

I. 

In  General. 

To  give  rise  to  the  responsibility  and  liability  of  the  Mexican 
Government  in  the  case  of  injuries  by  individuals  acting  alone 
or  in  groups  as  brigands  or  mobs,  some  independent  delinquency 
of  the  Government  itself,  a  failure  after  opportunity  afforded 
either  to  prevent  the  injury  or  to  punish  the  guilty  must  be  shown. 
A  government  is  not,  as  is  so  often  erroneously  assumed,  a  guar- 
antor of  the  security  of  aliens.  Under  ordinary  circumstances, 
a  government  is  merely  under  a  duty  to  furnish  governmental 
machinery  which  normally  would  protect  the  alien  in  his  person 
and  property.  This  does  not  mean  that  this  machinery  must  be  so 
efficient  as  to  prevent  all  injury  to  aliens,  but  merely  that  it  must 
be  so  organized,  constituted  and  operated  that  a  violent  assault  of 
one  individual  upon  another  is  only  a  fortuitous  event.  Under 
the  particular  circumstances  existing  all  reasonable  measures 
must  have  been  taken  to  prevent  the  injury  and  punish  the  guilty. 
As  a  corollary  of  this  principle,  a  government's  duty,  and  conse- 
quent responsibility  for  breach,  is  measured  by  its  ability  to  pro- 
tect the  alien  in  a  given  case  under  given  circumstances.^ 

Commissioner  VVadsworth  in  the  United  States-Mexican 
Arbitration  of  i86S,  expressed  the  opinion  that  the  test  of  a 
nation's  responsibility  for  injuries  committed  upon  aliens  in  its 
territory'  by  private  citizens,  is  whether  it  has  enforced  its  laws 
'"with  reasonable  vigor  and  promptness  to  prevent  violence  when 
practicable,  or  failing  in  that  to  punish  the  offenders  criminally, 
or  to  indemnify  the  injured  party  by  [its]  remedial  civil  justice."^ 

To  render  the  ( rovernment  liable,  therefore,  it  has  been  estab- 
lished by  precedents  to  be  necessary  for  the  claimants  to  prove 
some  actual  or  implied  governmental  complicity  in  the  act,  before 

1  Dowley  (U.  S.)  vs.  Costa  Rica,  July  2,  1860.  Moore's  Arb.  3032;  Calvo, 
Droit  luteruational  (6th  ed.)  Sec.  1274,  makes  the  "facilities  at  hand"  the 
test  of  responsibility.  Mr.  Hay,  Secretary  of  State,  to  Mr.  Dudlev,  Minister 
to  Peru,  September  5th,  1899,  <3  Moore's  Dig.  806.  But  the  apprehension  and 
punishment  of  the  guilty  will  be  demanded.  Boroiard,  Diplomatic  Protec- 
tion   of  Citizens   Abroad,    Sees.  86,   87. 

2  Mills    (U.   S.)    V.   Mexico,   July   4,   1868,   Moore's  Arb.   3034. 


115 

or  after  it,  either  by  directly  ratifying-  or  approving  it,-''  or  by  an 
implied,  tacit  or  constructive  approval  of  the  negligent  failure 
to  use  due  diligence  to  prevent  the  injury,*  or  to  investigate  the 
case,  or  to  prosecute  and  punish  the  guilty  individuals/'  Inci- 
dental grounds  would  be:  Inadequate  punishment,''  negligently 
permitting  offender  to  escape,'''  inexcusable  delay  in  investigat- 
ing the  facts,^  or  to  enable  the  victim  to  pursue  his  civil  remedies 
against  the  offenders.^ 

What  is  the  due  diligence  which  is  contemplated  by  the  rule 
as  applied  in  the  illustrations  given  above  depends  upon  the  cir- 
cumstances of  each  case  and  is  sometimes  expressed  by  the  phrase 
that  "ability  is  a  test  of  responsibility." 

Notwithstanding  this  general  rule,  cases  have  not  been  infre- 
quent where  a  more  rigorous  test  of  liability  has  been  imposed, 
notably  against  more  poorly  organized  or  weak  states  like  China, 
Turkey,  Morocco  and  fonnerly  Greece.  Here  liability  for  as- 
saults by  private  individuals  has  been  predicated,  not  on  any  im- 
puted governmental  complicity  or  negligence,  but  on  the  mere 
failure  to  prevent  the  injury. ^"^    In  many  of  these  cases  there  has 


3  Kane's  notes  on  arbitration  convention  with  France,  18.31.  Philadel- 
phia 18.3G,  p.  31.  Piertras  Negras  claims  (Mexico  vs.  United  States.  July  4, 
1868,  Moore's   Arb.   30,35). 

4  Hubbell,  et  ;;1.  v.  United  States  (1870).  1.5  Ct.  CI.  .546  (Chinese  indem- 
nity) ;  Alnbama  claim  (U.  S.)  vs.  Great  Britain,  May  8.  1871,  6  Moore's  Dig. 
999;  Evarts  (Netherlands)  v.  Venezuela,  Feb.  28,  190.3,  Ralston,  904.  The  re- 
cent case  of  "Pussyfoot"  Johnson  in  Lcndon.  where  the  jiolice  without  resist- 
ance, it  seems,  permitted  a  mob  to  assault  this  individual,  illustrates  the 
rule  of  governmentr.l  liability. 

5  De  Brisset  (U.  S.)  v.  Venezuela.  Dec.  .5,  188.5.  Moore's  Arb.  2858;  Pog- 
gioli  (Italy)  v.  Venezuela,  Feb.  13.  1903,  Rnlston,  869;  Renton  Claim  v.  Hon- 
duras,  For.   Rel.   1004,   p.   363    (refusal   to   diligently   prosecute  and   punish). 

6  Lenz  claim  v.  Turkey,  Mr.  Hay,  Secretary  of  State,  to  Mr.  Strauss, 
Mar.  25,  1899,  For.  Rel.  1899,  p.  766. 

7  Lenz   and    Renton   cases,   supra. 

8  Ruden    (U.   S.)  v.   Peru,   Dec.  4,  1868.  Moore's  Arb.  165-3. 

9  Unjustifiable  pardon  to  the  offenders — Montijo  (U.  S.)  v.  Colombia,  Aug. 
17,  1874,  Moore's  Arb.  1421,  1444.  Cotesworth  and  Powell  (Gt.  Brit.)  v. 
Colombia,   Dec.   14,   1872,  ibid.,   2050,  2085. 

10  Cases  of  private  murder  of  aliens  in  China,  reported  in  For.  Rel.  1880, 
Japanese  subjects  murdered  in  China.  1.S74,  Moore's  Arb.  4S.57 ;  Dreyfus.  Arbi- 
trage International,  176,  177;  Lieut.  Cooper  claim  (Gt.  Brit.)  v.  Turkey.  18,88. 
81  St.  Pap.  178:  Caldern  (U.  S.  v.  China.  Nov.  8.  1,8,58,  Moore's  .\rb.  4629; 
Hubbell  V.  TTnited  States,  supra  (based  principally  on  treaty  obligation)  ; 
Russia  V.  Turkey,  1,826  (Turkey  held  liable  for  depredations  of  Moorish 
pirates)  13  St.  Pap.  899.  16  St.  Pap.  647,  6.57.  Five  cases  of  British  subjects 
injured  in  Greece,  about  18.50.  by  acts  of  individuals,  Batv,  116-118;  Marcca 
V.  Morocco,  190O  (1901)  28  Clunet.  205.  Murder  of  Italian  soldier  in  Crete,  1906 
(1907)  1  A.  J.  I.  L.  1.58;  (1906)  13  R.  G.  D.  I.  P.  223;  Montijo  (U.  S.)  v.  Colombia, 
Aug.  17,  1874,  Moore's  Arli.  1421  ff.  (absence  of  power  considered  equivalent 
to  "omission  to  use  it.)  Turkey  and  Morocco  held  responsible  for  acts  of 
pirates  from  their  shores  on  three  occasions,  (1905)  12  R.  G.  D.  I.  P.  ■563-.56o. 
"Insufficiency  of  the  protective  measures  afforded."  an  alleged  ground  of  lia- 
bility in  certain   cases  in   Turkey,   For.   Rel.  1897,   p.  592. 


ii6 

been  a  disregard  of  the  rule  that  an  individual  assumes  a  risk  in 
visiting  notoriously  unstable  countries  or  regions,  and  the  local 
government  has  been  held  to  accountability  as  an  insurer  of  the 
safety  of  aliens,  or  rather  of  the  citizens  of  powerful  countries. 
The  weaker  countries,  notwithstanding  their  lesser  ability  to  pro- 
tect aliens,  have  thus  in  these  instances  been  held  to  a  higher  de- 
gree of  responsibility  for  the  safety  of  aliens  than  strong  states. 
This  departure  from  principle  has  been  strongly  influenced  by  the 
fact  that,  in  international  relations,  arguments  are  generally  of 
importance  according  to  the  physical  power  of  their  proponents. 

While  a  consular  agent  is  usually  only  a  local  resident  busi- 
ness man  who  exercises  minor  consular  functions,  he  has,  never- 
theless, been  deemed  to  be  entitled  to  a  measure  of  special  protec- 
tion by  the  local  authorities  not  enjoyed  by  the  ordinary  private 
alien. 11  His  official  position  alone,  however,  should  not  serve  to 
make  the  local  government  an  insurer  of  his  safety,  although  this 
doubtless  renders  it  more  difficult  for  the  government  to  over- 
come the  presumption  of  negligence  ordinaril)^  attaching  to  a  no- 
torious act  of  brigandage  in  a  populous  town. 

It  is  a  fundamental  principle  that  every  nation,  whenever  its 
laws  are  violated  by  anyone  owing  obedience  to  them,  whether 
citizen  or  alien,  is  privileged,  free  from  interference  by  other 
states,  to  inflict  the  penalties  incurred  by  the  transgressor  if  found 
within  its  jurisdiction,  provided  that  the  laws  themselves,  the 
methods  of  administering  them,  and  the  penalties  prescribed  are 
not  in  derogation  of  modern  standards  of  civilized  justice. i-  It, 
of  course,  sometimes  appears  that  the  criminal  procedure  of  for- 
eign countries  contains  harsher  provisions  and  is  deficient  in  many 
safeguards  which  the  American  law  provides  for  the  benefit  of 


11  Attacks  on  German  consulate  in  Havre,  1888,  in  Messina,  1888,  and  in 
Warsaw,  1901  (1889)  16  Cluuet  250;  Borchard,  sees.  86,  90.  French  and  Ger- 
man consuls  murdered  in  Salonica,  1876,  67  St.  Pap.  917;  6  Moore's  Dig. 
Sec.  704,  discusses  cases  in  Venezuela,  Peru,  Nicaragua,  Santo  Domingo  and 
United  States.  See  the  following  authorities ;  Vattel,  Chittys  ed.  Bk.  IV,  Ch. 
VI,  Sec.  75,  p.  469;  Phillimore,  II,  Sec.  246,  p.  263;  Pradier-Fod<5r6,  IV,  Sec. 
2108.  But  see  case  of  Servian  Vice-consul  assassinated  in  Turkey,  1890,  Baty, 
224  and  Wippermau  (U.  S.)  v.  Venezuela,  Dec.  5,  1885,  Moore's  Arb.  3041,  which 
were  not  taken  out  of  the  general  rule  of  non-liability. 

12  Mr.  Marcy,  Secretary  of  State,  to  Mr.  Jackson,  charg6  at  Vienna,  Jan- 
uary 10th.  1854.  2  Moore's  Dig.  88;  Ballis  (U.  S.)  vs.  Venezuela,  Feb.  13, 
1903,  Senate  Document  317,  58th  Congress,  Second  Session,  p.  376. 


117 

the  accused.  This,  however,  does  not  constitute  ground  for 
diplomatic  complaint,  as  the  right  of  the  United  Slates  is  confined 
and  limited  to  a  demand  that  its  citizens  be  given  the  full  and  fair 
benefit  of  the  system  of  law  which  exists,  without  discrimination 
in  favor  of  natives  or  other  aliens. ^^ 

2. 

Acts  of  Individuals. 

As  a  general  rule  a  government  is  not  liable  for  the  acts  of 
individuals.  "By  the  law  of  nations,  if  the  citizens  of  one  state 
do  an  injur}'  to  the  citizens  of  another,  the  government  of  the 
offending  subject  ought  to  take  every  reasonable  measure  to 
cause  reparation  to  be  made  by  the  offended.  But  if  the  offender 
is  subject  to  the  ordinary  processes  of  law,  it  is  believed  this  prin- 
ciple does  not  generally  extend  to  oblige  the  government  to  make 
satisfaction  in  case  of  the  inability  of  the  offender. "^  "The  Gov- 
ernment of  the  United  States  is  not  liable  to  foreign  governments 
for  misconduct  of  its  private  citizens  within  their  jurisdiction, 
such  citizens  not  being  in  any  sense  its  representatives. "- 

The  well  known  case  of  the  seven  Mexican  shepherds  is  im- 
portant at  this  point.  These  seven  shepherds  were  hung  by  pri- 
vate persons  in  Texas  near  the  Mexican  border  on  November  8, 
1875,  after  having  been  accused  of  cattle  thefts.  Mr.  Mariscal, 
the  Mexican  Minister  to  Washington,  on  January  30,  1875,  ^^~ 
dressed  a  note  to  Mr.  Fish,  then  Secretary  of  State  of  the  United 
States,  protesting  against  the  inaction  of  the  Texas  and  Federal 
police  agencies  in  making  only  a  laconic  and  perfunctory  investi- 
gation of  the  affair,  after  the  Mexican  consuls  at  Brownsville  and 
San  Antonio  had  brought  the  matter  to  the  attention  of  the  proper 
officers  of  justice  in  Texas  and  had  earnestlv  solicited  an  investi- 


13  Mr.  Marcy,  Secretary  of  State,  to  Mr.  Jackson,  Apr.  6,  1856,  2  Moore'a 
Dig.  89,  6  ibid,  275.  See  also  the  illuminating  opinions  in  In  re  Neely  (1900, 
C.  C.  S.  E.  N.  Y.)  103  Fed.  626  and  iu  Neely  v.  Henkel,  (1901)  180  U.  S.  109, 
21  Sup.  Ct.  302,  by  Justice  Harlan. 

1  Lincoln,  At.  Gen.  1802,  1  Op.  106,  107. 

2  Mr.  Forsyth,  Sec.  of  State,  to  Mr.  Calderon  de  la  Barea,  Sept.  17,  1839, 
MS.  Notes  to  Spain,  VI,  39.  Governments  do  not  undertake  to  reimburse 
persons  for  the  criminal  acts  of  individuals,  such  as  theft.  (Magoon's  Re- 
ports, 471.) 


ii8 

gation  and  punishment  of  the  guilty.  The  United  States  Gov- 
ernment disclaimed  any  liability  for  the  deaths.  Mr.  Fish,  Sec- 
retary of  State,  on  Feb.  19,  1875,  ^^  reply  to  the  representations 
O'f  Mr.  Mariscal,  said  that  it  was  the  duty  of  a  government  to 
prosecute  the  offenders  according  to  law  by  all  the  means  in  its 
power,  but  that  if  this  duty  were  honestly  and  diligently  fulfilled 
the  Government  was  discharged  from  further  obligation. 
"Though  the  crime,"  said  Mr.  Fish,  "by  which  the  Mexican 
shepherds  are  alleged  to  have  lost  their  lives  may  not  be  without 
precedent,  it  seems  obviously  unreasonable,  in  view  of  the  pe- 
culiar condition  of  the  quarter  where  it  was  perpetrated,  to  expect 
that  it  would  certainly  be  punished.  =!=  *  *  Mexicans  in 
Texas  and  Americans  in  Mexico  who  engage  in  business  near  the 
border,  must  not  at  pre:-ent  or  perhaps  for  some  time  to  come 
expect  either  government  to  insure  them  against  all  the  risks  in- 
separable from  such  enterprises."'''  Mr.  Fish  through  this  state- 
ment placed  the  United  States  in  the  position  of  acquiescing  in 
a  theory  so  often  advanced  by  Latin-American  nations,  that  an 
alien  entering  a  coimtry  or  district  in  which  normal  conditions 
of  peace  are  disturbed  or  in  which  the  normal  state  of  affairs  is 
one  of  revolution  and  brigandage,  cannot  expect  the  same  degree 
of  protection  to  which  he  would  be  entitled  in  a  normal  or  peace- 
ful community — that  he  is  put  on  notice  of  the  dangers  involved 
in  residence  or  travel  in  such  disturbed  places  and  enters  or  re- 
mains at  his  own  risk.  In  this  connection  it  should  be  noted  that 
the  proclamation  of  President  Wilson,  quoted  in  Chapter  V,  Paft 
C,  Sec.  10,  is  very  much  in  the  nature  of  an  application  of  Mr. 
Fish's  rule  to  the  residence  or  travel  of  citizens  of  the  United 
States  in  Mexico.^ 

The  general  rule  that  there  is  no  responsibility  for  acts  of 
individuals  applies  equally  to  members  of  military  forces.'^ 

Where  by  reasonable  care,  however,  the  injury  couid  have 
been  avoided,  the  Government  will  be  held   responsible.     "The 


3  For.   Rel.  187.5,  II,  97.3,  6  Moore's  Dig.  788,  789. 

4  For  other  cases  where  acts  of  individuals  were  not  held  attributnble 
to  the  government,  see  the  case  of  Jose  D.  Lamar,  in  Santo  Domingo  in 
1886,  163  MS.  Dom.  Let.  306,  6  Moore's  Dig.  780,  also  Mr.  Sherman,  See.  of 
State,  to  Mr.  Hoshi,  Japanese  min.,  March  31,  1897,  For.  Rel.  1897,  368. 

5  S.   Ex.   Doc.   35,   52   Cong.    2   Sess. 


IT9 

.efovemir.ent  of  a  foreign  state  is  liable  not  only  for  any  injury 
done  by  it,  or  with  its  permission,  to  citizens  of  the  United  States 
or  their  properly,  but  for  any  such  injury  which  by  the  exercise 
of  reasonable  care  it  could  have  averted."^' 

The  United  States  Government  in  the  case  of  Frank  Lenz 
an  American,  murdered  in  1894,  by  nationals  in  Turkey,"  success«- 
fully  pressed  a  claim  against  the  Turkish  government  on  the 
ground  of  negligence  in  punishing  the  offenders. 

In  the  case  of  Caleb  Abdullah,  a  Turkish  subject,  killed  in 
California,  in  1891,^  that  of  Jos.  N.  Adir,  an  Ottoman,  killed  in 
Washington  in  1893,^  and  that  of  "Harry  the  Turk"  who  disap- 
peared in  Portland,  Maine,  in  1896,^^  the  United  vStates  dis- 
claimed liability  on  the  ground  that  no  negligence  could  be  at- 
tributed to  the  government. 

In  regard  to  the  United  States  claim  for  the  murder  of 
Charles  W.  Renton,  in  Honduras  in  1894,  Moore  in  his  Digest. ^^ 
quotes  United  States  Secretary  of  State,  Mr.  Hay,  as  follows: 
"While  a  state,  said  Mr.  Hay,  is  not  ordinarily  responsible  for 
injuries  done  by  private  individuals  to  other  private  individuals 
in  its  territory,  it  is  the  duty  of  the  state  diligently  to  prosecute 
oud  properly  to  punish  the  offenders;  and  'for  its  refusal  to  do 
so  it  may  be  held  answerable  in  pecuniary  damages.'  " 

3- 

Mob  Violence. 

The  sound  rule  of  international  law  is  undoubtedly  that  a 
government  should  indemnify  foreigners  for  injuries  to  persons 
and  property  as  the  result  of  mob  violence  directed  at  them  as 


6  Report  of  Dr.  Francis  Wharton,  Solicitor  of  Dept.  of  State,  afflrmed 
by  Mr.  Bayard,  Sec.  of  State,  to  Mr.  Scruggs,  mln.  to  Colombia,  May  19, 
1885,  For.  Rel.  1885,  212.  As  to  the  difficulties  between  France  and  Santo 
Domingo  and  the  Caccavelli  incident,  see  For.  Rel.  1895,  I,  235.  The  Caccavelli 
incident  related  to  the  murder  of  a  French  merchant  of  that  name  at  Samana. 

7  See  Doc.  33,  54th  Cong.  1st  Sess.  For  Rel.  189.5,  II,  12.57;  For.  Rel. 
1.^5,  II,  1315,  1332.  6  Moore's  Dig.  792;  For.  Rel.  1899,  766-7,  6  Moore's  Dig. 
794.     New   York   Times,   Jan.   8,   1902. 

8  MS.   Notes  to  Turliey,   II,  115,  id.   122,  6  Moore's  Dig.  793. 

9  MS.   Notes  to  Turkey,   II,  115. 

10  MS.   Notes  to  Turkey,  II,  115,  122,  6  Moore's  Dig.  793. 

11  Vol.  6,  p.  798. 


I20 

foreigners,  and  where  the  local  authorities  were  unwilling  or 
unable  to  prevent  the  injuries  and  the  courts  unable  or  unwilling 
to  punish  the  criminals.^  Where  none  of  these  elements  are 
present  all  that  can  fairly  be  expected  is  a  prosecution  of  the 
offenders  according  to  law  in  good  faith  and  to  the  extent  of 
the  Government's  power.- 

Elihu  Root  in  an  article,  "The  Basis  of  Protection  to  Citizens 
Residing  Abroad,"-^  discusses  the  subject  with  force  and  clarity. 

"The  foreigner  is  entitled  to  have  the  protection  and  redress 
which  the  citizen  is  entitled  to  have,  and  the  fact  that  the  citizen 
may  not  have  insisted  upon  his  rights,  and  may  be  content  with 
lax  administration  which  fails  to  secure  them  to  him,  furnishes  no 
reason  why  the  foreigner  should  not  insist  upon  them  and  no 
excuse  for  denying  them  to  him.  It  is  a  practical  standard  and 
has  regard  always  to  the  possibilities  of  government  under  exist- 
ing conditions.  The  rights  of  the  foreigner  vary  as  the  rights 
of  the  citizen  vary  between  ordinary  and  peaceful  times  and 
times  of  disturbance  and  tumult ;  between  settled  and  ordinary 
communities  and  frontier  regions  and  mining  camps. 

"The  diplomatic  history  of  this  country  presents  a  long  and 
painful  series  of  outrages  on  foreigners  by  mob  violence.  These 
have  uniformly  been  the  subject  of  diplomatic  claims  and  long- 
continued  discussion,  and  ultimately  of  the  payment  of  indemnity. 
An  examination  of  these  discussions  will  show  that  in  every  case 
the  indemnity  was  in  fact  paid  because  the  United  States  had  not 
done  in  the  particular  case  what  it  would  have  done  for  its  own 
citizens  if  our  laws  had  been  administered  as  our  citizens  were 
entitled  to  have  them  administered.  Of  course,  no  government 
can  guarantee  all  the  inhabitants  of  its  territory  against  injury 
inflicted  by  individual  crime,  and  no  government  can  guarantee 
the  certain  punishment  of  crime ;  but  every  citizen  is  entitled  to 
have  police  protection  accorded  to  him  commensurate  with  the 
exigency  under  which  he  may  be  placed.  If  he  is  able  to  give 
notice  to  the  government  of  intended  violence  against  him  he  is 
entitled  to  have  due  measures  taken  for  its  prevention,  and  he  is 
entitled  always  to  have  such   vigorous  prosecution  and  punish- 

1  1   Am.   Journ.   Int.   L.   34. 

2  6  Moore's  Dig.   115,  1  A.   J.    I.   L.,   p.   6. 

3  Vol.  IV,  A.  J.  I.  L.,  p.  523  and  525,  et  seq. 


121 

ment  of  those  who  are  guihy  of  criminal  violation  of  his  rights 
that  it  will  be  apparent  to  all  the  world  that  he  cannot  be  mis- 
used with  impunity  and  that  he  will  have  the  benefit  of  the  de- 
terrent effect  of  punishment." 

Mr.  Root  discusses  at  some  length  cases  of  mob  violence  in 
the  United  States  and  the  several  attempts  of  the  United  States 
Government  to  avoid  liability  under  the  pretext  that  there  ex- 
isted no  legal  facilities  for  protecting  aliens,  and  concludes  his 
discussion  with  these  words:  "It  is  to  be  hoped  that  our  Gov- 
ernment will  never  again  attempt  to  shelter  itself  from  respon- 
sibility for  the  enforcement  of  its  treaty  obligations  to  protect 
foreigners  by  alleging  its  own  failure  to  enact  the  laws  necessary 
to  the  discharge  of  those  obligations." 

4- 

Brigandage. 

In  the  case  of  the  murder  of  Knapp  and  Reynolds  in  the  vil- 
lage of  Ghuorie,  Turkey,  by  notorious  brigands,  the  United 
States  Government  did  not  rest  until  the  brigands  and  the  cul- 
pable officials  who  had  previously  neglected  or  refused  to  appre- 
hend them  had  been  punished.^ 

In  a  discussion  of  brigandage,  the  case  of  Leo  M.  Baldwin,  a 
citizen  of  the  United  States  killed  by  bandits  in  Mexico,  is  par- 
ticularly valuable.-"*  Although  settled  without  prejudice  to  the 
contentions  of  either  State,  the  case  brings  up  clearly  the  issues 
involved  in  a  typical  brigandage  case.  Baldwin,  who  was  Su- 
perintendent of  the  Valencia  Mine  in  the  State  of  Durango, 
Mexico,  was  shot  and  killed  by  two  alien  outlaws  in  Ventanas  on 
August  19,  1887.  This  was  only  one  of  a  series  of  violent  acts 
of  bandits  in  this  section.  One  of  the  bandits  was  supposed  to 
have  been  a  native  official  of  some  prominence  in  Ventanas.  The 
Mexican  Government  it  was  alleged  did  nothing  to  make  life 
and  property  secure  in  this  district  and  there  was  evidence  that^^j 
the  acts  of  the  bandits  had  been  partially  inspired  by  race  hatred'4' 
Mr.  Blaine,  Secretary  of  State  of  the  United  States,  in  instru<2''r 


4  For.   Rel.   1883,  850,   et  seq.,   For.   Rel.   1884,  .532.  et  seq.,    For.    Rel.,l«85, 
827,  et  seq.,  For.   Rel.  1889,  72.5-728.     6  Moore's  Dig.  800.  ,/^' 

5  Discussed  in  6  Moore's  Digest,  p.  801.  /'>* 


s  ■ 


122 

tions  to  Mr.  Dougherty,  Charge,^  made  the  following  comment  on 
the  case,  which  it  seems  advisable  to  include  here  at  some  length : 

"Mr.  Mariscal,  however,  also  refers  to  the  rule  laid  down 
bv  the  United  States  on  several  occasions  in  respect  to  the 
liability  of  a  government  for  injuries  caused  by  mob  violence, 
as  an  answer  to  the  claim  made  in  the  present  case.  The  lead- 
ing instance  cited  by  him  in  this  relation  is  that  of  the  outrages 
upon  the  Chinese,  in  respect  to  which  the  Government  of  the 
United  States  denied  its  legal  liability  to  respond  in  damages, 
although  in  reality  it  has  paid  more  than  half  a  million  dol- 
lars to  the  Chinese  Government  for  the  relief  of  the  sufferers. 
The  attacks  upon  the  Chinese  and  the  killing  of  Mr.  Baldwin, 
possess,  indeed,  certain  similar  features.  Both  were  directed 
against  foreigners ;  both  were  actuated  in  a  measure  by  preju- 
dice growing  out  of  differences  in  nationality ;  and  both  were 
committed  in  wild  and  sparsely  settled  regions.  But  here  the 
parallelism  ends.  The  Chinese  outrages  were  a  sudden  and 
violent  outbreak  of  one  body  of  aliens  against  another.  So  that 
this  Government,  replying,  on  the  i8th  of  February,  1886,  to 
the  representations  of  the  Chinese  minister,  said :  'The  attack 
upon  them  [the  Chinese],  as  your  [the  Chinese  minister's]  note 
tndv  states,  was  made  suddenly  by  a  lawless  band  of  about  150 
armed  men,  who  had  given  no  previous  intimation  of  their 
criminal  intent.' 

"In  the  case  of  Mr.  Baldwin,  the  amplest  notice  was  given 
both  to  the  Federal  and  State  authorities  of  Mexico  of  the  law- 
less proceedings  of  those  who  committed  that  crime.     *     *     * 

"To  sustain  this  denial  of  redress  Mr.  MarLscal  has  invoked 
the  familiar  rule  that  the  measure  of  protection  and  of  privilege 
to  which  foreigners  residing  in  a  country  are  entitled  is  that 
which  the  government  of  the  country  accords  to  its  own  citizens. 
As  a  general  proposition,  this  rule  is  undoubtedly  acceptable ;  but 
its  applicability  is  by  no  means  universal.  Where  the  question 
to  be  determined  is  the  measure  of  private  rights  and  remedies 
under  the  municipal  law,  the  rule  above  stated  may,  with  certain, 
well-settled  exceptions,  readily  be  adopted.     But,  where  a  gov- 


fi     No.    430,    Jan.    5,    1S91,    MS.    Inst.    Mex.    XXIII,    14,    21,    6    Moore's    Dig., 
p.  802. 


123 

eminent  asserts  that  its  citizens  in  a  foreign  country  have  not 
been  duly  protected,  it  is  not  competent  for  the  government  of 
that  country  to  answer  that  it  has  not  protected  its  own  citizens, 
and  thus  to  make  the  failure  to  perform  one  duty  the  excuse  for 
the  neglect  of  another. 

"It  is  true  that  in  this  way  foreigners  may  enjoy  an  advaiv 
tage  over  the  citizens  of  a  country.  This,  however,  is  not  a  mat- 
ter for  foreign  governments  to  consider.  They  have  no  power 
to  regulate  the  relations  of  another  government  to  its  citizens ; 
nevertheless,  they  are  bound  to  ask  that  their  own  may  be  pro- 
tected. 

"*  *  *  It  is  not,  *  *  *  my  purpose  to  enter  into  a  dis- 
quisition upon  the  utterances  of  publicists  as  found  in  their  works. 
I  will,  however,  quote  from  the  last  edition  of  Calvo's  exhaustive 
treatise  on   international   law   the   following  pertinent   passages : 

"'Section  1271.  Any  person  disturbing  public  tranquillity, 
or  violating  the  sovereign  rights  of  a  nation,  or  its  laws,  offends 
the  state,  declares  himself  its  enemy,  and  incurs  just  punishment. 
His  responsibility  is  not  less  when,  instead  of  attacking  the  state, 
the  crimes  or  offenses  of  which  he  has  been  guilty  menace  per- 
sonal safety  or  the  rights  and  property  of  individuals.  In  both 
cases,  the  government  would  fail  to  perform  its  duty  if  it  did  not 
repress  the  injury  committed  and  cause  the  offender  to  feel  the 
weight  of  its  penal  legislation.  The  state  is  not  only  under  obli- 
gations to  secure  the  reign  of  peace  and  justice  among  the  differ- 
ent members  of  the  society  whose  organ  it  is ;  it  must  also  see, 
and  that  most  carefully,  that  all  who  are  under  its  authority 
offend  neither  the  government  nor  the  citizens  of  odier  countries. 
Nations  are  obliged  to  respect  one  another,  to  abstain  from 
offending  or  injuring  each  other  in  any  way,  and,  in  a  word,  fromi 
doing  anything  that  can  impair  each  other's  interests  and  disturb 
the  harmony  which  should  govern  their  relations.  A  state  that 
permits  its  immediate  subjects  or  citizens  to  offend  a  foreign 
nation  becomes  a  moral  accomplice  in  their  offenses  and  renders 
itself  personally  responsible. 

"  'As  regards  its  enforcement,  this  principle  has  nothing  ab- 
solute, and  admits  of  reservations  inherent  in  the  very  nature  of 
things ;  for  there  are  private  acts  which  the  most  vigilant  author- 


124 

ity  can  not  prevent,  and  which  the  wisest  and  most  complete  legis- 
lation can  not  always  hinder  or  repress.  All  that  other  nations 
can  ask  of  a  government  is  that  it  shall  show  that  it  is  influenced 
by  a  deep  sense  of  justice  and  impartiality,  that  it  shall  admonish 
its  subjects  by  all  the  means  in  its  power  that  it  is  their  duty  to 
respect  their  international  obligations,  that  it  shall  not  leave  of- 
fenses into  which  they  may  have  been  led  unpunished;  and  fin- 
ally, that  it  shall  act  in  all  respects  in  good  faith  and  in  accord- 
ance with  the  precepts  of  natural  law ;  to  go  beyond  this  would 
be  raising  a  private  injury  to  the  magnitude  of  a  public  offense, 
and  would  be  holding  an  entire  nation  responsible  for  a  wrong 
done  by  one  of  its  members.     *     *     * 

"  'Section  1274.  *  *  *  When  the  Government  has  had 
knowledge  of  the  act  from  which  the  damage  has  resulted  and 
has  not  displayed  due  diligence  in  preventing  it  or  in  arresting  its 
consequences,  either  with  the  means  at  its  disposal,  or  with  those 
which  it  might  have  asked  from  the  law-making  power,  the  State 
will  be  responsible  for  willful  neglect  of  diligence.  In  that  case, 
the  degree  of  responsibility  of  the  State  will  have  for  its  basis 
the  facilities  (whether  greater  or  less)  which  it  had  for  making 
previous  provision  for  the  act,  and  the  precautions  (whether 
greater  or  less)  which  it  was  in  its  power  to  take  to  prevent  it." 

"The  passages  above  cited  are  sustained  by  the  learned  author 
with  ample  citations  of  authority  and  an  exhaustive  review  of  the 
precedents.  The  United  States  asks  nothing  more  than  is  due 
to  it  under  the  rule  laid  down  by  the  distinguished  Argentine 
publicist. 

"Mr.  Mariscal  has  also  invoked  the  familiar  rule  that  claim- 
ants must  pursue  their  remedies  in  the  courts  of  the  country  be- 
fore they  can  resort  to  diplomatic  intervention.  As  a  general 
proposition  this  rule  may  be  accepted  as  true.  But  it  is  obvious 
that  it  is  applicable  only  where  adequate  judicial  remedies  exist 
for  the  redress  of  the  grievance  complained  of.  In  the  present 
case  no  such  remedies  have  been  alleged  to  exist,  and  the  sub- 
ject-matter of  the  complaint  is  not.  in  reality,  one  of  judicial  cog- 
nizance. This  Government  is  not  aware  of  any  courts  or  of  any 
processes  by  which  the  issue  could  be  tried  and  redress  obtained 
by  the  claimant  in  Mexico.    Nor,  where  the  question  presented  is 


125 

whether  the  Government  of  a  country  has  discharged  its  duty  in 
rendering  protection  to  the  citizens  of  another  nation,  can  it  be 
conceded  that  that  government  is  to  be  the  judge  of  its  own  con- 
duct.'"^ 

When  James  H.  Duvall,  a  citizen  of  the  United  States,  was 
killed  by  highwaymen,  in  Mexico,  Mr.  Gresham,  Secretary  of 
State,^  said :  "The  Mexican  authorities  promptly  apprehended  the 
murderers  and  the  Department  understand  that  they  were  tried, 
convicted,  and  punished.  Under  these  circumstances  it  is  not 
believed  that  any  claim  for  damages  could  be  maintained." 

In  1868  John  Braniff  was  killed  by  a  band  of  robbers  while 
at  work  on  the  Vera  Cruz  railroad.  The  American  Charge  re- 
ported to  the  State  Department  that  Mexico  would  investigate 
and  make  reparation.  Secretary  Seward  replied :  "The  engage- 
ment which  the  Mexican  Government  has  made  tO'  investigate 
the  case,  and  its  assurance  that  upon  such  investigation  the  Gov- 
ernment would  direct  what  justice  may  require,  is  entirely  satis- 
factory."^ 

In  a  case  where  injuries  had  been  inflicted  on  United  States 
citizens  by  bandits  in  the  interior  of  Persia,  the  United  States 
Government  demanded  merely  the  apprehension  and  punishment 
of  the  offenders. 1^ 

The  Rev.  Benj.  W.  Labaree,  an  American  missionary  in 
Persia,  and  his  servant,  were  barbarously  killed  by  a  body  of 
religious  fanatics.  Upon  the  failure  of  the  Persian  government 
to  apprehend  and  punish  the  criminals  the  United  States  Govern- 
ment made  strong  representations  to  Persia  which  resulted  in  the 
settlement  as  follows:  (i)  $30,000  cash  in  gold;  (2)  effective 
and  swift  punishment  of  all  guilty  persons;  (3)  no  special  tax 
on  the  province  or  on  Christians  to  cover  the  indemnity .^^ 

Very  strong  representations  were  made  by  the  United  States 
in  the  Perdicaris  case.  "On  the  night  of  May  18,  1904,  a  band 
of  natives,  headed   by  a  'bandit'  named  Raisuli,  broke  into  the 


7  Mr.    Blaine,    Sec.    of   State,    to   Mr.    Dougherty,    charge,    No.   430,   Jan.    5. 
1891,   MS.    Inst.   Mexico,   XXIII,   14,   21. 

8  In   a  message  to   Mrs.   Robinson,    Sept.   20,   1894,   198  MS.   Dom.   Let.   637, 
6  Moore's   Dig.   806. 

9  U.    S.    For.    Rel.   1868,    p.   582,   Amer.   Journal    of   Int.    Law,    Vol.    I,    p.   5. 

10  210  Sept.  5,  1899,  MS.  Inst.  Persia,  XVIII,  177,  6  .Moore's  Dig.  806. 

11  For.   Rel.  1904,  657-677,  835.     6  Moore's  Dig.   807. 


126 

country  house  of  Ion  Perdicaris,  an  American  citizen,  about  three 
miles  from  Tangier,  and  carried  him  away,  together  with  his 
stepson  named  Varley,  a  British  subject.  The  consul-general  of 
the  United  States  and  the  British  minister  informed  the  Sultan's 
deputy  that  the  Moorish  authorities  were  to  be  held  personally 
responsible,  and,  in  order  to  secure  the  release  of  the  captives, 
insisted  that  any  terms  demanded  by  Raisuli  be  immediately 
granted.  The  South  Atlantic  Squadron  of  the  United  States  was 
ordered  to  Tangier.  Long  negotiations  ensued  between  the 
Moorish  authorities  and  Raisuli  for  the  payment  of  a  ransom 
and  the  release  of  the  prisoners.  On  June  22,  1904,  Mr.  Hav 
telegraphed  to  the  American  consul-general  at  Tangier  that  the 
United  States  'wants  Perdicaris  alive  or  Raisuli  dead,'  and  that 
further  than  this  the  least  possible  complication  with  Morocco 
and  other  powers  was  desired.  The  consul-general  was  directed 
not  to  arrange  for  landing  marines  or  seizing  custom  houses 
without  specific  instructions.  The  captives  were  released  on  the 
24th  of  June.  A  British  man-of-war,  which  had  been  at  Tangier, 
left  on  the  25th  and  the  American  squadron  departed  two  davs 
later."i2 

Indian  depredations  present  cases  where  the  responsibility  of 
the  government,  by  reason  of  its  laxity,  must  be  very  clearly 
shown.  "The  Department  of  State,  while  declining  to  present  a 
claim  to  the  Mexican  Government  for  the  murder  of  a  citizen  of 
the  United  States  by  Indians  in  Mexico,  said :  'It  is  noticed,  how- 
ever, that  you  allege  that  the  Indians  were  incited  to  make  their 
attack  on  the  person  and  property  of  your  husband  by  the  author- 
ities of  Yucatan.  If  this  can  be  shown  the  Mexican  Government 
may  be  held  accountable  therefor.'  "^^  "The  Canadian  govern- 
ment held  that  it  was  not  liable  to  pay  compensation  for  horses 
stolen  from  a  citizen  of  the  United  States  by  the  Blood  In- 
dians."" 


12  For.  Rel.  1904.  496-504.  As  to  the  action  of  France,  see  For.  Rel,  1904, 
307;   and   of  Great  Britain,  id.   338;  6  Moore's   Dig.   807. 

13  Mr.  Cadwalader,  Act.  Sec.  of  State,  to  Mrs.  Stephens,  Dec.  24,  1875, 
111  MS.  Dom.  Let.  227;  6  Moore's  Dig.  808. 

14  Mr.  Sherman,  Sec.  of  St.Hte,  to  Mr.  Hay,  ambass?.  to  England,  No.  285, 
Oct.  27,  1897,  MS.  Inst.  Great  Britain,  XXXII,  276;  Mr.  Adee,  Second  Assist.  Sec. 
of  State,  to  Mr.  Walton,  Oct.  27,  1897,  222  MS.  Dom.  Let.  51,  enclosing  copy  of  a 
despatch  from  Mr.  Hay,  No.  139,  Oct.  8,  1897;  6  Moore's  Dig.  808. 


127 

To  summarize  the  liability  of  the  Mexican  Government  for 
brig-andage,  it  may  be  said  that  there  is  no  liability  unless  the 
Government  has  been  negligent  either  in  prevention  or  cure. 
If  the  acts  could  have  been  prevented  by  reasonable  vigilance,  or 
the  perpetrators  punished  by  reasonable  diligence,  and  did  escape 
punishment  because  of  the  laxity  of  the  Mexican  Government, 
there  is  liability.  Where  the  district  within  which  the  brigandage 
occurred  was  in  a  condition  making  it  practically  impossible  for 
the  state  to  prevent  brigandage  or  to  punish  the  offenders,  there 
is  no  liability. 1^ 


15    Borchard  Dip.  Prot.  Cit.  Abr.,  p.  78 


128 


CHAPTER  V. 

OBSTACLES    AND    DEFENSES    TO    PRESENTATION 

OF  CLAIMS. 

Certain  conduct  on  the  part  of  the  claimant  will  have  the 
effect  of  vitiating  even  an  undoubtedly  just  claim.  Such  con- 
duct, if  brought  to  the  attention  of  the  claimant's  government, 
should  induce  it  to  refuse  diplomatic  aid  to  the  claimant.  Such 
conduct,  if  found  to  have  been  present,  will  result  in  the  dismissal 
of  the  claimant's  case  before  a  claim's  commission  or  other  body 
organized  to  investigate  and  adjudicate  international  claims. 

Conduct  of  this  nature  will  be  divided  into  three  classes : 

A.  Expatriation. 

B.  Renunciation. 

C.  Censurable  Conduct. 


129 

A. 
EXPATRIATION. 

Diplomatic  protection  may  be  forfeited  by  vokintary  ex- 
patriation. The  United  States,  in  the  Act  of  Congress  of  March 
2,  1907,  named  four  methods  of  expatriation:  (i)  Foreign  nat- 
uraHzation ;  (2)  Taking  oath  of  allegiance  to  a  foreign  state; 
(3)  Marriage  of  an  American  woman  to  a  foreigner;  and  (4) 
Residence  abroad  for  certain  periods  of  time,  of  a  naturalized 
citizen. 

I'ut  a  citizen  cannot  expatriate  himself  during  war.i  Nor  can 
a  corporation  expatriate  itself.-  The  expatriation  laws  of  states 
diifer  widely  and  the  status  of  a  citizen  and  the  degree  of  pro- 
tection accorded  him  in  view  of  a  possible  expatriation  law,  de- 
pend upon  the  laws  of  his  home  state. 

The  United  States,  during  the  great  war,  passed  a  statute 
permitting  repatriation  by  oath  of  citizens  who  had  expatriated 
themselves  by  enlisting  in  the  military  or  naval  forces  of  and 
swearing  allegiance  to  a  state  at  war  with  the  Central  Powers. 
This  Act  may  be  found  in  1918  Compiled  Statutes  Compact  Edi- 
tion, §4352  (12). 


1  H.   Doc.  326,  59th  Congress,  2cl   Sess.,  28. 

2  Moore's  Arbitration,   2319. 


I30 
B. 

RENUNCIATION. 

I. 

Contractual  Renunciation. 

The  Latin-American  states  have  been  the  chief  contenders  for 
the  principle  commonly  called  the  Calvo  Doctrine,  after  its  great- 
est enunciator,  its  theory  being  that  renunciation  by  contract  is 
effectual.  In  Chapter  I,  Part  B  above,  it  has  been  shown  that 
the  attempt  to  introduce  renunciations  through  constitutional  and 
municipal  provisions  has  been  futile  and  that  the  provision  of 
the  Mexican  Constitution  of  1917,  providing  that  foreigners  can- 
not acquire  lands,  waters  and  concessions  without  renouncing 
their  citizenship  and  the  right  to  appeal  to  their  home  govern- 
m.ents  for  diplomatic  aid  in  respect  to  such  property,  would  not 
be  held  in  accord  with  international  law.  Renunciations  made 
because  of  this  provision  would  not  be  binding  upon  aliens  in 
Mexico.  Actual  contractual  renunciations  have  been  denied  ef- 
fect by  Creat  BIritain,  Germany  and  the  United  States ;  but  the 
Calvo  Doctrine  is  firmly  supported  by  the  Latin-American 
states,  who  refuse  to  recognize  the  opposing  theory  that  such 
contract  terms  are  invalid  internationally. 

2. 

Implied  Renunciation. 

Many  acts  of  the  citizen  abroad  imply  a  renunciation  of  pro- 
tection. Among  them  are  failure  to  register  at  his  consulate ; 
protracted  residence  abroad ;  departure  from  the  country  soon 
after  naturalization  with  evident  intent  to  return  to  domicile  in 
the  country  of  origin  or  previous  allegiance ;  belligerent  domicile ; 
censurable  conduct  in  certain  instances  (See  Part  C  of  this  chap- 
ter) ;  accepting  public  office  or  employment  abroad  when  an  un- 
qualified oath  of  allegiance  is  required  or  when  the  employment 
is  essential  politically ;  military  service  for  a  foreign  nation  (tem-- 
jiorary  renunciation  in  most  cases)  ;  the  exerci-e  of  political 
rights  or  participation  in  politics  in  a  foreign  country  if  such 
participation  involves  identification  with  a  foreign  government.*' 


3    See  Borchard   Dip.   Pro.   of  Cit.  Abr'd.,   Sec.  379,  380. 


13^ 

C. 

CENSURABLE  CONDUCT.^ 

I. 

In  General. 

Governments  and  Claims  Commissions  have  introduced  a 
variety  of  principles  into  the  o;-eneral  rules  of  censurable  conduct 
which  will  be  taken  up  in  some  detail  later.  These  principles  may 
be  summarized  by  the  following-  well-known  maxims: 

"No  one  can  profit  by  his  own  wrong." 

"He  who  comes  into  equity  must  come  with  clean  hands." 

"Ex  dolo  malo  non  oritur  actio." 

In  his  report  to  the  President  Jan.  20,  iSS/.-"*  Mr.  Bayard,  then 
Secretarv  of  State  of  the  United  States,  said :  "  'The  principle  of 
public  policy.'  said  Lord  Mansfield,  in  Hohnan  v.  Johnson,  Cow- 
per's  Rep.,  343.  'is  this:  Ex  dolo  malo  non  oritur  actio.  No 
court  will  lend  its  aid  to  a  man  who  founds  his  cause  of  action 
upon  an  immoral  or  an  illegal  act.'  Ex  turpi  causa  non  oritur 
actio;  by  innumerable  rulings  under  the  Roman  common  law,  as 
held  by  nations  holding-  Latin  traditions,  and  under  the  common 
law  as  held  in  Eng^land  and  the  United  States,  has  this  principle 
been  applied.  The  lex  fori  determines  the  question  of  turpi- 
tude.    *     *     *." 

2. 

Concealment  and  Denial  of  Citizenship. 

Many  countries,  and  among  them  Mexico,  require  foreigners 
to  register  their  nationality  periodically  before  their  respective 
consulates.  And,  though  failure  to  do  so  would  not  preclude 
interposition  by  their  home  governments,  such  a  failure  might 
operate  to  bring  the  case  within  the  application  of  the  principle 
that  a  concealment  or  denial  of  citizenship  will  destroy,  or  de- 
duct  from,   the   protection  accorded   the   citizen. 


4  The   classification    of   cen.surable    conduct    adopted    in    the   discussion    is 
largely  that  used  by  Borchard  in  his  Diplomatic  Protection  of  Citizens  Abroad. 

5  For.   Rel.  1887,  592,  607,  S.  Ex.   Doc.  64,  49  Cong.  2d   Sess. ;   Moore's  Int. 
Arb.  II,  1793-1800. 


132 

Thornton  &  Lieber,  Umpires  of  the  United  States-Mexico 
I-.Iixed  Claims  Commis.sion  of  1868,  held  that  the  failure  of 
Americans  to  comply  with  the  provision  of  the  Mexican  Consti- 
tution of  1857  demanding  that  foreigners  acquiring  land  register 
their  desire  to  retain  their  foreign  citizenship,  or  else  become 
automatically  Mexican  citizens,  did  not  deprive  them  of  their 
United  States  citizenship  and  so  of  the  protection  of  their  home 
government.^  The  precedent  would  apply  equally  well  to  the  Mexi- 
can Constitution  of  1917,  which  contains  a  provision  similar  in 
its  effect  to  this  one  of  the  Constitution  of  1857.  And  so  with 
the  requirements  of  Chili  and  Mexico  that  foreigners  must  take 
out  a  "carta  de  seguirdad."'^ 

These  precedents  are  in  accord  with  the  principle  (see  Chap- 
ter I,  Part  B)  that  an  alien  cannot  be  deprived  of  foreign  citizen- 
ship by  municipal  regulation.  But  the  fact  that  the  claimant  has 
failed  to  assert  or  has  concealed  his  citizenship,  may  undoubtedly 
be  taken  into  account  when  considering  the  quantum  of  protec- 
tion to  be  granted  the  claimant.  Such  conduct  on  the  part  of  the 
citizen  might  possibly  be  considered  a  breach  of  patriotic  duty. 
The  United  States  Department  of  State  has  followed  this  pro- 
cedure, notably  in  the  case  of  naturalized  Russians  and  Turks. 
The  principle  was  favored  by  the  United  States-Spanish  Mixed 
Claims  Commission  of  1871,'^  in  the  case  of  La  Coste  before  U.  S. 
Mex.  Comm.  of  1868  f  and  in  the  case  of  Gautier  (U.  S.)  v.  Mex- 
ico, July  4,  1 86810 

3- 

Fraudulent  or  Exorbitant  Claims. 

When  fraud  is  discovered  in  advance,  a  Department  of  State 
will  not  aid  the  claimant.  This  rule  is  admirably  stated  by  Mr. 
Seward,  Secretary  of  State  of  the  United  States,  in  a  note  to 
Lord  Lyons,  British  Minister,  May  30,  1862,11  and  again  by  Mr. 
Frelinghuysen,  Sec.  of  Statei-  as  follows : 


6  Moore's  Arbitration,  2480,  2481   and   2482. 

7  Moore's  Arbitration,  2482,  2543-2545. 

8  Moore's  Arbitration   2.562. 

9  Moore's   Arb.   2561. 

10  Moore's   Arb.   2450. 

11  MS.   Notes   to  Great  Britain.   IX,   187. 

12  To  Mr.  Suydam,  Sept.  25,  1882,  cited  in  report  of  Mr.  Bayard,  Sec.  of 
Sfcite,  to  the  President,  on  the  case  of  Antonio  Pelletier,  Jan.  20,  1887,  For. 
Rei.  1887,  606. 


133 

"It  may  be  liere  observed  that  this  Government  exercises  a 
broad  discretion  in  determining  what  claims  it  will  diplomatically 
present  ai^ainst  other  nations.  It  has  not  lent,  and  will  not  lend, 
its  influence  in  favor  of  fraudulent  claims.  And  when  in  behalf 
of  an  individual  this  Government  demands  of  another  power  pay- 
ment of  money,  it  should  not  close  its  doors  ai^'ainst  an  investi- 
o:ation  into  the  question  whether  the  apparent  title  of  the  claim- 
ant to  the  money  is  valid,  or,  because  of  his  own  fraud,  is  void. 
Were  the  case  reversed  this  Government  would  contend  for  that 
rio-ht.  Any  other  doctrine  must  impair  the  dignity  and  imperil 
the  rights  of  those  who  have  honestly  obtained  American  citizen- 
ship." 

If  the  fraud  is  only  discovered  after  the  awards  have  been 
niade,  the  claimant's  government  will,  in  accord  with  good  inter- 
national practice,  set  aside  the  awards  and  refund  any  moneys 
received  to  the  other  government.  All  the  awards  that  the  United 
States- Venezuelan  Commission  of  1866  received  were  set  aside 
on  the  ground  of  the  fraud  of  the  Arbitration  Commission.^'^ 

It  is  believed  that  a  claim  which  is  on  its  face  exorbitant 
might  well,  in  the  interests  of  good  international  practice,  be 
placed  in  the  same  category  as  fraudulent  claims  and  be  denied 
the  support  of  the  government  of  the  claimant. 

4. 
Malice  and  Negligence. 

Malice  and  negligence,  in  their  effect  in  international  law, 
are  in  the  same  class  as  fraud.  "To  international  claims  the  rules 
of  general  jurisprudence  in  this  relation  apply  as  follows:  A 
party  to  a  malicious  wrong  cannot  recover  from  another  for  dam- 
ages therefrom  resulting  to  himself.  A  person  whose  negligence 
is  the  immediate  cause  of  a  negligent  injury  to  himself  cannot 
recover  from  another  damages  for  such  injury. "i* 


1.3  Moore's  Arb.  1659.  For  other  cases  In  point  see  Moore's  Arb.  12.55- 
1266;  13  Stat.  L.  595;  16  Stat.  L.  6.33;  15  Stat.  L.  444;  20  Stat.  L.  777;  Moore's 
Arb.  1342;  18  Stat.  L.  70;  S.  Ex.  Doc.  52,  43d  Cong.  1st  Sess. ;  and  Moores 
Arb.   1324-1340. 

14     Wharton,   Int.   Law   Digest,  Sec.  243,   II,  700. 


134 

In  judging  of  the  effect  of  negligence  the  rule  of  comparative 
negligence  is  applied.  This  is  more  in  accord  with  the  Civil  Law 
than  the  Anglo-Saxon  Law. 


Evasion  of  National  Duties,  and  Particularly  of  Military 

Service. 

Deserters  from  the  army  will,  of  course,  lose  the  protection  of 
rheir  home  government. 

As  Halleck  has  said,  "the  right  of  voluntary  expatriation  ex- 
ists only  in  time  of  peace  and  for  lawful  purposes,"  and  the 
Lnited  States  would  probably  not  recognize  attempts  of  its 
citizens  to  take  on  Mexican  citizenship  in  order  to  avoid  mili- 
tary duty ;  but  would,  nevertheless,  refuse  diplomatic  protection 
to  a  citizen  who  had  made  such  an  unpatriotic  attempt  to  avoid 
his  duties  as  a  citizen  in  times  of  national  peril.  "The  reflection 
is  a  very  obvious  one,  that  in  such  a  crisis  a  good  and  loyal 
citizen  might  be  expected  to  be  at  home  in  the  United  States  and 
co-operate  with  his  fellow  citizens  in  maintaining  the  government 
against  domestic  enemies,  rather  than  to  be  residing  abroad  and 
evoking  aid  to  protect  claims  of  his  own  for  redress  of  injuries 
which  he  may  have  suffered  when  domiciled  amid  the  perils  of 
foreign  revolution. "^-^ 

The  fact  that  the  claimant  is  a  naturalized  citizen  who  has 
maintained  a  permanent  domicile  in  the  foreign  country  for 
years,  should  weigh  heavily  against  him  in  seeking  the  aid  of 
the  country  of  his  naturalization. 

6. 

Breach  of  the  Local  Law. 

The  rule  is  universally  accepted  that  an  injury  resulting  from 
a  breach  of  the  local  law  will  result  in  a  complete  or  partial  for- 
feiture of  the  protection  of  the  home  government.  The  alien 
government  usually  insists  only  on  a  fair  trial  and  the  infliction 
of  no  unusual  or  disproportionate  punishments. 


15    Mr.  Seward,  Sec'y.   of  State,  to  Mr.  Marsh,  May  7,  1863,  For.   ReL  1S63, 
Part  II,  p.  10G7. 


135 

7. 

Breach  of  International  Law. 

B'orchard  claims  that  individuals,  in  a  qualified  sense,  are 
subjected  to  international  duties,  althou.srh  international  law  is 
generally  considered  to  govern  nations  alone. 

The  carrying  of  contraband,  resistance  to  the  right  of  visit 
and  search,  or  similar  violations  of  a  belligerent  right  possible 
only  in  time  of  war,  are  punishable  by  the  aggrieved  nation,  and 
the  individual  by  his  act  forfeits  the  protection  of  his  home  state. 
The  penalty  imposed  is  generally  confiscation  of  the  property 
involved. 

8. 

Breach  of  National  Law. 
It  is  a  general  principle  of  international  law  that  a  citizen  who 
violates  his  national  law  must  take  the  consequences,  and  is  de- 
prived of  the  diplomatic  protection  of  his  government  when  he  is 
abroad.  But  the  decision  whether  or  not  the  citizen  shall  have 
forfeited  his  rights  is  entirely  in  the  hands  of  his  home  govern- 
ment ;  and  if  that  government  cares  to  protect  him  and  further 
his  claim,  it  is  no  defense  for  the  defendant  government  to  as- 
sert that  the  claimant  has  violated  his  national  law.^^ 

9- 

Trading  With   the  Enemy  or   Prohibited  and   Unlawful 

Trading. 

Citizens  of  the  United  States  and  of  the  other  allied  powers 
who  resided  in  Mexico  during  the  Great  War  and  engaged  in  trade 
with  the  Central  Powers,  might  very  well  be  denied  the  diplomatic 
protection  of  their  home  governments  on  the  ground  that  their 
conduct  in  so  trading  was  a  violation  of  law  during  time  of  na- 
tional peril.  As  to  citizens  of  the  United  States,  it  was  not  un- 
lawful for  them  to  trade  with  the  Central  Powers  until  war  was 
declared  by  the  United  States. 


16     For  eases  see  Borchard   Dip.   Prot.   Cit.   Abr.,   p.   747. 


136 

lO. 

The  Effect  of  Declarations  of  President  Taft  and  Presi- 
dent Wilson  on  the  Liability  of  the  Mexican 
Government. 

It  is  a  positive  rule  of  international  law,  that  the  alien  claim- 
ant who  seeks  redress  through  his  home  government  for  injuries 
occasioned  him  in  a  foreign  country,  though  he  may  have  been 
greatly  injured,  and  unquestionably  treated  with  injustice,  by 
the  government  of  domicile,  may  be  deprived  of  his  international 
remedy  through  culpability  and  contributory  negligence  on  his 
own  part.  Acts  of  culpability  are  discussed  elsewhere  in  this 
chapter.  Acts  of  negligence  are  governed,  in  general,  by  the 
imiversally  accepted  rules  of  private  law,  but  the  rule  of  coin- 
parative  negligence,  a  rule  not  applied  by  the  private  law  of  the 
United  States,  has  been  applied  in  international  law.  There  are 
some  acts  of  foreigners  in  Mexico  which  might  be  included  under 
the  term  "negligence"  by  reason  of  certain  very  definite  declara- 
tions issued,  from  time  to  time,  by  Presidents  of  the  United  States 
pertinent  to  the  Mexican  situation.  These  declarations  in  their 
rules  regarding  negligence  might  be  questioned  as  binding  coun- 
tries other  than  the  United  States,  but  are  undoubtedly  very  im- 
portant in  defining  the  negligence  of  United  States  citizens  in 
Mexico. 

On  March  2,  1912,  William  Howard  Taft,  President  of  the 
United  States,  issued  a  proclamation,  quoted  in  full  below,  which 
admonished  citizens  of  the  United  States  not  to  participate  in  the 
Mexican  revolutionary  turmoil,  and  which  gave  notice  (this  part 
of  the  proclamation  has  been  italicized)  that  such  participation 
would  be  at  the  peril  of  the  participant,  and  that  no  protection 
would  be  granted  from  "the  appropriate  legal  consequences  of 
their  acts,"  unless  such  consequences  violate  "equitable  justice 
and  humanity  and  the  enlightened  principles  on  international 
law." 


"Proclamation  by  the  President  of  the  United  States 
OF  America  Regarding  Disturbances  in  Mexico. 
March  2,  1912. 
(No.  1184.) 

Whereas  serious  disturbances  and  forcible  resistance 
to  the  authorities  of  the  estal:)lished  Go^•ernnlent  exist  in 
certain  portions  of  Mexico ;  and 

Whereas  under  these  conditions  it  is  the  duty  of  all 
persons  within  the  jurisdiction  of  the  United  States  to 
refrain  from  the  ctmimission  of  acts  prohibited  l)y  the 
law  thereto  relating  and  subversive  of  the  tranquillity  of 
a  country  with  which  the  United  States  is  at  peace ;  and 

Whereas  the  laws  of  the  United  States  prohibit  under 
such  circumstances  all  persons  within  and  subject  to 
their  jurisdiction  from  taking"  part  contrary  to  said  laws 
in  any  such  disturbances  adversely  to  such  established  govern- 
ment ;  and 

Whereas  by  express  enactment  if  two  or  more  persons 
conspire  to  commit  an  offense  against  the  United  States 
or  any  act  of  one  conspirator  to  effect  the  object  of  such 
conspiracy  renders  all  the  conspirators  liable  to  fine  and 
imprisonment ;  and 

Whereas  there  is  reason  to  believe  that  citizens  of 
the  United  States  and  others  within  their  jurisdiction  fail 
to  apprehend  the  meaning  and  operation  of  the  applicable 
laws  of  the  United  States  as  authoritatively  interpreted 
and  may  be  misled  into  participation  in  transactions 
which  are  violations  of  said  laws  and  which  will  render 
them  liable  to  the  severe  penalties  provided  for  such 
violations ; 

Now,  therefore,  in  recognition  of  the  laws  governing 
and  controlling  in  such  matters  as  well  as  in  discharge  (^f 
the  obligations  of  the  United  States  toAvards  a  friendly 
country,  and  as  a  measure  of  precaution,  and  to  the  end 
that  citizens  of  the  United  States  and  all  others  within 
their  jurisdiction  may  be  deterred  from  subjecting  them- 
selves to  legal  forfeitures  and  penalties ; 

T.  \\'^illiam  Howard  Taft,  President  of  the  United 
States  of  America,  do  hereby  admonish  all  such  citizens 
and  other  persons  to  abstain  from  every  violation  of  the 
laws  hereinbefore  referred  to,  and  do  hereby  warn  them 
that  all  violations  of  such  laws  will  be  rigorously  prose- 
cuted; and  1  do  hereby  enjoin  upon  all  ofificers  of  the 
United  States  charged  with   the  execution  of  such   laws 


138 

the  utmost  diligence  in  preventing  violations  thereof  and 
in  bringing  to  trial  and  punishment  any  offenders  against 
the  same ;  and  finally  /  do  hereby  gvue  notice  that  all  persons 
oz(}ing  allegiance  to  the  United  States  who  may  take  part  in 
the  disturbances  now  existing  in  Mexico,  unless  in  the  neces- 
sary defense  of  their  persons  or  property,  or  who  shall 
otherwise  engage  in  acts  subversive  of  the  tranquillity  of  that 
country,  will  do  so  at  their  peril  and  that  they  can  in  no  wise 
obtain  any  protection  from  the  Gozfernment  of  the  United 
States  against  the  appropriate  legal  consequ-ences  of  their 
acts,  in  so  far  ais  such  consequences  are  in  accord  with 
equitable  justice  and  humanity  and  the  enlightened  princi- 
ples if  international  IcnvX^ 

In  Testimony  Whereof,  I  have  hereunto  set  my  hand 
and  caused  the  seal  of  the  United  States  to  be  affixed. 

Done  at  the  City  of  Washington  this  2nd  day  of 
March,  in  the  year  of  our  Lord  one  thousand 
nine  hundred  and  twelve,  and  of  the  Inde- 
pendence of  the  United  States  of  America  the 
one   hundred  and  thirty-sixth. 

WM.  H.  TAFT. 
By  the  President : 

Huntington  Wilson, 

Acting  Secretary  of  State. "^^ 

This  declaration  clearly  places  participants  or  abettors  in  the 
same  category  as  the  revolutionists,  insurrectionists  or  brigands, 
whom  they  have  aided,  and  withdraws  from  them  the  protection 
of  the  United  States  Government,  provided  they  are  treated  in 
accordance  with  the  standards  of  treatment  established  interna- 
tionally as  proper  for  the  particular  group  they  have  assisted. 

In  the  following  excerpt  from  an  address  on  Mexican  Affairs 
delivered  by  President  Woodrow  Wilson  before  the  Congress  of 
the  United  States,  on  August  27,  1913,  the  President  seems  to 
have  served  notice  on  citizens  of  the  United  States  who  did  at 
that  time,  or  intended  during  the  continuance  of  the  Mexican 
turmoil   to   reside   in  or   visit  the   Republic  of  Mexico,  that  al- 


17  Italics  not  in  the  original. 

18  May    be  found    in   Amer.    .lour.    Int.    Law,   Vol.    VI,    Supp.   1912,    p.   146. 


139 

though  the  United  Slates  Government  would  protect  such  of  its 
citizens  as  could  not  avoid  their  presence  in  Mexico,  tho.;e  who 
stayed  or  visited,  when  doing-  so  could  fairly  have  been  avoided, 
would  be  guilty  of  a  variety  of  contributory  negligence. 

"While  we  wait,  the  contest  of  the  rival  forces  will 
undoubtedly  for  a  little  while  be  sharper  than  ever,  just 
because  it  will  be  plain  that  an  end  must  be  made  of  the 
existing  situation,  and  that  very  promptly ;  and  with  the 
increased  activity  of  the  contending  factions  will  come, 
it  is  to  be  feared,  increased  danger  to  the  noncombatants 
in  Mexico  as  well  as  to  those  actually  in  the  field  of  bat- 
tle. The  position  of  outsiders  is  always  particularly  try- 
ing and  full  of  hazard  where  there  is  civil  strife  and  a 
whole  country  is  upset.  We  should  earnestly  urge  all 
x^mericans  to  leave  Mexico  at  once,  and  should  assist 
them  to  get  away  in  every  way  possible — not  because  we 
would  mean  to  slacken  in  the  least  our  efforts  to  safe- 
guard their  lives  and  their  interests,  but  because  it  is  im- 
perative that  they  should  take  no  unnecessary  risks  when 
it  is  physically  possible  for  them  to  leave  the  country. 
We  should  let  every  one  who  assumes  to  exercise  author- 
ity in  any  part  of  Mexico  know  in  the  most  unequivocal 
way  that  we  shall  vigilantly  watch  the  fortunes  of  those 
x\mericans  who  can  not  get  away,  and  shall  hold  those 
responsible  for  their  sufferings  and  lo>sses  to  a  definite 
reckoning.  That  can  be  and  will  be  made  jilain  beyond 
the   possibility   of  a   misunderstanding."^'* 

Borchard,  in  his  "Diplomatic  Protection  of  Citizens  Abroad," 
page  740,  in  discussing  proclamations  of  Presidents  Taft  and 
Wilson,  says :  "We  are  not  concerned  with  the  various  proclama- 
tions of  presidents,  such  as  the  recent  proclamations  of  Presi- 
dents Taft  and  Wilson  prohibiting  the  exportation  of  arms  into 
Mexico,  by  which  the  obligations  of  neutrals  have  been  increased 
in  the  interests  of  public  policy  and  the  peace  of  contiguous  neigh- 
bors. Violation  of  such  a  proclamation  would  incur  all  the  i)en- 
alties  of  a  violation  of  national  law  together  with  a  forfeiture  of 
diplomatic  protection."-^ 


19  From  Address  of  President  Wilson  on  Mexican  Affairs  before  Congress, 
August  27,  1913,  Supplement  Vol.  VII,  Amer.  Jour.  Int.   Law,  p.  283. 

20  Page   740,   Citing   U.    S.    v.    Chaves,   228    U.    S.   525. 


I40 

II. 

Unneutral  Conduct  or  Unfriendly  Acts. 

(a)  Unlawful  Expeditions. 

On  April  22,  1793,  Washington  issued  his  famous  neutral 
proclamation  in  which  he  declared  that  no  citizen  would  be  pro- 
tected against  punishments  imposed  under  the  law  of  nations  b}^ 
"committing,  aiding  or  abetting  hostilities  against  any  of  the 
state  (bellic^erent)  powers,  or  by  carrying  to  any  of  them  those 
articles  which  are  deemed  contraband  by  the  modern  usage  of 
nations." 

The  U.  S.  Revised  Statutes,  sees.  5281-5291,  now  make  it  a 
Federal  offense  to  aid  belligerents  in  specified  ways.^i 

(b)  Unneutral   Military  and  other  Acts  of  Service  to 
Foreign  Countries  or  Belligerents. 

Most  states  do  not  prohibit  their  citizens  from  taking  on  mili- 
tary service  in  foreign  countries ;  but  in  such  cases  they  impose 
the  penalty  of  an  almost  complete  loss  of  the  right  to  protection. 
Great  Britain  has  made  punishable  by  fine  and  imprisonment  en- 
listments of  its  citizens  for  military  service  against  a  nation  "at 
peace  with  Her  Majesty." 

The  measure  of  protection  which  an  enlisting  citizen  will  re- 
tain, provided  he  has  not  by  oath  completely  expatriated  himself, 
will  generally  be  as  follows:  (i)  his  treatment  must  not  be  in- 
human; (2)  the  rules  of  war  must  not  be  violated  to  his  preju- 
dice if  he  is  captured  in  a  foreign  army;  (3)  he  must  not  be  dis- 
criminated against  as  compared  with  other  aliens  on  account  of 
his  nationality.  "American  citizens  who  implicate  themselves  in 
foreign  revolutions  have  a  very  weak  title  to  national  protection, 
available  only  to  prevent  a  flagrant  or  harsh  violation  of  their  per- 
sons through  unusual  forms  of  punishment. "^2 

The  ATexican  law,  which  puts  Mexican  citizenship  upon  a 
foreigner  who  enlists  in  the  Mexican  army,  has  been  interpreted 


21  For  cases  of  expeditions  started  or  organized  in  the  United  States 
und  held  to  be  illegal  and  relieving  the  participants  of  the  protection  of 
the  United  States  Government,  see  Borchard  Dip.  Prot.  Cit.  Abr.  Sees  361, 
362,  363. 

22  Borchard   Dip.  Prot.  Cit.  Abr.,  p.  769;  see  also.  Sec.  364. 


141 

by  the  United  States  as  depriving-  a  citizen  of  the  I'nitcd  Stales 
of  his  previous  citizenship  pro  tempo  and  until  he  re-estabU^,hes 
his  United  States  citizenship  by  returning  to  the  United  States.^'' 

As  witnessed  by  the  statute  mentioned  above  some  countries, 
notably  Great  Britain,  have  at  times  favored  a  harsh  interpreta- 
tion of  this  rule.  But  Great  Britain  successfully  pressed  the  claim 
of  one  of  her  citizens  for  military  services  rendered  Brazil.-"* 
The  practice,  however,  of  pressing  claims  for  military  services 
rendered  abroad  is  exceptional  and  apparently  not  good  inter- 
national procedure.-^ 

Other  services  rendered  during  a  war  in  which  the  countr}^ 
of  domicile  is  engaged  might  be  such  as  to  deprive  the  foreigner 
of  his  home  government's  protection.  Shipbuilding,  under  such 
circumstances,  barred  a  claim  against  Peru,-*^  as  did  engineering 
projects  in  Mexico,-''  acting  as  agent  for  a  confederate  state,^^ 
and  the  giving  of  other  services  to  the  confederacy.-''  "Too  great 
a  degree  of  political  activity  in  a  foreign  country  often  entails  a 
waiver  of  national  protection  ;  and  when  it  involves  identification 
with  armed  factions,  forfeits  neutral  protection. "■^•*^ 

Unfriendly  acts  against  a  foreign  government,  generally  in- 
fringements of  the  local  law  of  the  country  of  residence,  usually 
lead  to  repressive  measures  by  that  state,  and  the  foreigner  who 
has  committed  such  acts  will  not  be  protected  if  no  unusual 
cruelty  or  harshness  becomes  apparent.  Such  unfriendly  acts 
might  include,  among  others,  offensive  publications,  inciting  na- 
tives, obnoxious  inter-niixture  in  local  politics,  and  sympathizing 
too  actively  with  bandits  and  insurgents. 

Furnishing  conibatants  with  supplies  and  other  aid  is  a  viola- 
tion of   neutrality   operating   to    forfeit   neutral   position.'^!      T^e 


23  See  Moore's  Arb.  275.^,  2300,  2467  and  2756. 

24  Moore's  Arb.  2107,  2108. 

25  See  Mr.  Blaiue,  Sec.  of  State  to  Mr.  Patterson.  April  7.  1800.  177  MS. 
Dom  Let.  180  and  Mr.  Sherman,  Sec.  of  State,  to  Mr.  Rodriquez.  No.  14,  April 
'Xi  1897,  For.  Rel.  1897,  .331 ;  and  same  to  Mr.  Coxe,  No.  71,  April  21,  18.97, 
id!  332. 

26  Heuver  v.  Peru,  Moore's  Arb.  1650. 

27  Fitch   (U.  S.)   v.  Mexico,  Moore's  Arb.  3476. 

28  Whity   (Gr.  Br.)   v.  U.  S.,  Moore's  Arb.  2823. 

29  Eakin   (Or.  Br.)  v.  U.  S.,  Moore's  Arb.  2819. 

30  Borchard   Dip.  Prot.  Cit.  Abr.  779. 

.31  See  Keiirett  v.  Chambers,  14  How.  38;  Hnrgous  {V.  S.)  v.  Mexico. 
Moore's  Arb  1280-83 :.  Sturm  v.  Mexico.  Moore's  Arb.  27.'56,  27."»7,  cases  in  Moore's 
Arb.  2756-27.57,  and  Mr.  Fish,  Sec.  of  State  to  Mr.  Murray,  Dec.  7,  1869,  82  MS. 
Dom.  Let.  453. 


142 

furnishing'  of  money  and  arms  is  clearly  such  unneutral  con- 
duct.'^^  But  if  these  were  furnished'  under  duress  the  rule  would 
not  apply.  Many  foreigners  in  Mexico  were  forced  by  Palaez 
and  other  bandit  or  revolutionary  leaders  to  furnish  money  and 
payment  under  the  physical  or  moral  duress  present  in  most  of 
these  cases  would  not  constitute  unneutral  conduct. 

"In  several  cases  [before  the  Spanish  Treaty  Claims  Com- 
mission] there  was  testimony  tending  to  show  that  the  claim- 
ants had  sympathized  with  the  insurgents  in  their  struggle  against 
Spain ;  but  it  was  difficult  to  prove  positive  acts  of  hostility  to  the 
Spanish  Government.  In  the  case  of  Caldwell,  No.  283,  the 
claimant  admitted  voluntary  enlistment  and  service  with  the  Cu- 
ban forces ;  and  his  claim  for  property  losses  was  dismissed  on 
final  hearing.  Likewise  one  of  the  claimants  in  Jova.  No.  122, 
admitted  service  in  the  Cuban  Army ;  and  redress  for  property 
losses  was  denied  him.  In  Iznaga,  No.  iii,  the  claimant,  with 
the  consent  of  the  Spanish  authorities,  paid  to  the  insurgents  cer- 
tain amounts  for  permission  to  remove  his  cattle  from  his  estates. 
The  evidence  showed  that  he  was  unable  without  this  permission 
or  without  the  protection  of  the  Spanish  troops  to  remove  his 
cattle.  He  was  not  for  these  payments  denied  a  standing  before 
the  Commission.  The  claimant  in  Bauriedel,  No.  239,  likewise 
received  an  award,  although  the  evidence  showed  a  contribution 
by  him  of  $2,500  to  the  Cuban  Junta  for  permission  to  remove 
lumber  from  the  interior  of  the  island.  According  to  the  testi- 
mony of  the  claimant  this  payment  was  made  onlv  after  advis- 
ing with  the  American  Consul-General  and  solelv  in  order  to 
save  the  lumber  which  the  insurgents  had  prevented  him  from 
removing."^^ 

(c)     Acts  "In  Aid  and  Comfort." 

Such  acts  forfeit  the  protection  of  the  home  government. 
Borchard"*  summarized  acts  which  constitute  giving  "aid  and 
comfort"  getting  his  material  from  the  decisions  of  commissions 


32  Rivas  y  Llamar  (U.  S.)  v.  Spain,  Moore's  Arb.  2781.     See  also  Moore's 
Arb.   2931,   1613-14,   2771,   2780   and   3305. 

33  Samuel    B.    Cranrtall,    "Law    Applied    by    Spanish    Treaty    Claims   Com- 
mission," Vol.   IV,  Amer.   Journ.   Int.   Law,  p.  822. 

34  Dip  Prot.  Cit.  Abr.,  pp.  788-791. 


143 

and  other  tribunals,  sitting-  on  international  law  questions. 
Among  other  acts  cited  as  "aid  and  comfort"  are  the  following: 
Standing  guard  over  prisoners  for  the  enemy ;  aiding  the  enemy 
in  defense ;  commercial  transactions  with  the  confederacy  ;  deal- 
ing in  blockaded  goods ;  subscription  to  a  confederate  loan  ;  sell- 
ing saltpetre  to  the  enemy,  and  selling  munitions  to  the  confed- 
eracy. 

In  view  of  the  World  War  situation,  the  rules  of  this  subject 
are  very  important  when  claims  of  the  United  States  and  other 
recently  allied  citizens  are  being  considered.  It  is,  of  course,  en- 
tirely in  the  hands  of  the  home  government  to  decide  whether  or 
not  its  citizens  have  given  "aid  and  comfort"  to  the  enemy  and 
so  deprived  themselves  of  the  right  to  protection. 

The  "aid  and  comfort"  must  be  voluntary,  of  course. 

12. 

Acts  Against  Public  Policy. 

A  diplomatic  claim  will  not  be  made  which  is  based  on  an  act 
against  public  policy.  "Diplomatic  aid  will  not  be  rendered  to 
press  on  a  foreign  government  a  claim  which  is  based  on  an  act 
against  public  policy.^^ 

35  Mk.  Seward,  See.  of  State,  to  Mr.  Whitney,  July  24,  1868,  79  MS.  Dom. 
Let.  119. 


144 

CHAPTER  VI. 

THE  MEASURE  OF  DAMAGES. 

The  rules  regarding  the  measure  of  damages  which  apply  in 
private  law,  do  not  entirely  govern  international  claims.  In  in- 
ternational law  the  important  factors  in  measuring  damage  are 
whether  thev  are  proximate  or  remote,  and  whether  they  are 
reasonably  certain  and  direct  or  speculative  and  consequential. 
The  arbitrators  of  the  Alabama  claims  refused  to  allow  damages 
arising  out  of  ( i )  the  loss  due  to  the  transfer  of  the  British  Flag 
to  the  American  Merchant  Marine,  (2)  the  enhanced  payment  of 
insurance  and  (3)  the  prolongation  of  the  war  and  the  addition  to 
the  cost  of  war  of  the  suppression  of  the  revolution.  "Pro- 
spective earnings  cannot  properly  be  made  the  subject  of  compen- 
sation, inasmuch  as  they  depend  in  their  nature  on  future  and 
uncertain  contingencies,"  said  the  arbitrators.^  This  precedent 
has  been  followed  in  cases  too  numerous  to  list,  and  undoubtedly 
fixed  a  rule  of  International  Law.- 

The  rule  has  been  followed  by  Acts  of  Congress  of  the  United 
States  in  organizing  commissions  to  make  international  damage 
awards.  International  commissions  have  consistently  denied 
speculative,   conjectural   and  remote   damages.^ 

Claims  for  indirect  damages  are  sometimes  allowed  when  it  is 
fairly  clear  that  they  are  certain  and  not  speculative,  imaginative 
and  incapable  of  computation.'* 

Future  profits  will  be  allowed  in  computing  the  value  of  a 
franchise  or  concession  which  has  been  arbitrarily  or  unlawfully 
cancelled.^ 

Expenses  incurred  in  presenting  and  prosecuting  claims  are 
often,  though  not  always,  allowed  as  elements  of  damage.^ 

In  some  instances  damages  incidental  to  the  presentation  of 


1  Moore's   Dig.   Vol.   VI,   p.   999. 

2  See  Borchard's  Diplomatic  Protection  of  Citizens  Abroad,  p.  414,  note  2. 
.3  For  authority  see:    Borchard  415,  Notes  1,  2,  3  and  4,  and  p.  416,  Notes 

1  and  2. 

4  For  cases  see:    Borchard,  p.  416,  Note  3  and  p.  417,  Note  1. 

.5  Borchard,   p.   417,   Note  2. 

6  Borchard,   p.   418,   Note  1. 


145 

a  claim  have  been  disallowed  on  Jie  theory  that  civil  courts  do  not 
allow  more  than  the  regular  court  co'^ts.' 

Generally  costs  and  expenses  are  considered  from,  an  equit- 
able, rather  than  from  a  technical  point  of  view. 

On  the  question  of  general  damages.  International  Law  does 
not  follow  the  theor}'  of  Municipal  Law  which  tries  to  make  the 
injured  party  entirely   "whole." 

Punitwe  or  exemplary  darna'^cs  have  been  demanded  by  the 
United  States  and  Great  Britain  in  numerous  instances  where 
the  injury  consisted  of  a  violent  and  inexcusable  attack  on  the 
lives  and  property  of  citizens,  where  there  has  been  a  criminal 
o-ovemmental  delinquency,  or  where  the  assault  was  on  a  consul 
or  some  other  per.-:on  with  official  or  semi-ofificial  status.  How- 
ever, these  cases  are  almost  always  ones  in  which  the  otitrages 
occurred  in  undeveloped  countries,  as  in  China,  Turkey  and 
Persia,  and  cases  warranting  a  claim  for,  or  the  granting  of, 
punitive  damages  are  not  very  likely  to  arise  against  any  but  such 
undelevoped  nations. 

Contract  and  Tort  Claims.  The  loss  of  probable  profits  is 
more  generally  compensated  in  the  case  of  contract  claims  than 
in  the  case  of  tort  claims,  on  the  theory  that  business  profits  are 
within  the  contemplation  of  the  parties.  This  theory  was  ex- 
pressed by  the  United  States  Supreme  Court  in  the  frequently 
internationally  cited  case  of  Howard  z'.  Stillwell  Tool  Manufac- 
turing  Company.^ 

In  cases  of  breaches  of  concession  contracts  the  reasonable 
value  of  the  expected  profits  of  the  concession  is  allowed,  to- 
gether with  the  amount  spent  in  the  construction  of  the  works.-' 

The  good-will  of  a  business  is  not  generally  estimated  by  the 
average  annual  profits. 

In  tort  cases  arbitrators  have  used  a  wide  discretion  in  esti- 
mating and  assessing  damages. 

Personal  Injuries.  The  commission  passing  upon  alien  claims 
against  China  arising  out  of  the  revolution  of  191 1  recommended 
that  the  rules  adopted  bv  the  Crown  Advocate  of  the  British  Gov- 


7  Borchard,  p.  418,   Note  2. 

8  139  U.   S.   199. 

9  May   v.   Guatemala,    Feb.   23,   1900,   For.    Rel.   1900,   &48,  654. 


146 

ernment  in  adjudicating  the  Boxer  claims  be  followed,  namely: 
in  case  of  partial  disablement,  there  should  be  obtained,  wherever 
possible,  "evidence  as  to  the  extent  to  which  the  life  of  the  claim- 
ant was,  from  an  insurance  point  of  view,  damaged ;  that  is  to 
say.  the  amount  of  extra  premium  which  an  insurance  office  would 
demand  of  the  claimant,  if  otherwise  sound,  applying  for  a  policy 
on  his  life,  the  extent  to  which  they  would  'load'  the  policy. 
The  sum  on  which  (his)  calculation  was  based  being  that  in 
which  the  claimant  would  naturally,  from  his  position  in  life,  take 
out  a  policy  if  about  to  marry,  (he)  then  allowed  the  capitalized 
value  of  these  extra  premia  as  compensation  for  the  injury  re- 
ceived." 

In  cases  of  arrest  or  imprisonment,  a  wide  range  of  estimate 
has  been  employed  by  arbitrators.  Umpire  Plumley  in  the  case 
of  Topaze,  before  the  British-Venezuelan  commission  of  1903. 
after  an  examinat'on  of  some  sixteen  cases,  concluded  that  $100 
per  day  for  unlawful  detention  seemed  the  sum  most  generally 
acceptable  to  arbitral  tribunals. 

Elements  that  have  been  considered  in  determining  awards  for 
unjust  arrest  and  imprisonnient  have  been  the  physical  and  moral 
suffering,  duration,  official  character  or  station  in  life,  the  neces- 
sary consequences  of  the  detention  and  such  factors. 

In  cases  of  tortuous  injuries  resulting  in  death,  varying  ele- 
ments have  been  considered  in  measuring  damages.^^ 

Interest.  No  general  rule  appears  regarding  the  award  of  in- 
terest.   It  is  usually  demanded,  and  sometimes  granted.ii 


10  See   Borchard    p.   424   and   425. 

11  Borchard  p.  428,  429. 


147 
CONCLUSION. 

President  Obregon  has  repeatedly  and  publicly  stated  that 
Mexico  will  pay  her  national  debts,  that  payments  on  the 
external  debt  would  soon  be  resumed,  and  that  his  Govern- 
ment is  prepared  to  deal  fairly  with  the  claims  of  foreigners 
for  damages  sustained  during  the  revolutions.  While  there 
exists  some  doubt  in  the  rninds  of  many  persons  in  the  United 
States  and  other  countries  regarding  the  good  faith  and  the 
strength  of  Obregon's  Government,  the  writer  is  convinced 
that  the  United  States  and  the  other  great  nations  can  well 
afford  to  have  faith  in  the  promises  of  the  present  Mexican 
regime. 

Mexico  has  passed  through  a  decade  of  internal  strife  that 
has  sapped  the  liquid  resources  of  the  country  and  exhausted 
the  people.  The  business  men  and  the  peons,  who  form  the 
overwhelming  majority  of  the  people,  are  tired  of  revolution. 
There  is  no  revolutionary  disposition  left.  There  may  in  the 
near  future  occur  local  disturbances  or  even  a  sudden  change 
in  the  personnel  of  the  administration,  but  there  cannot  come 
about  another  great  conflagration. 

The  revolution  that  began  with  the  overthrow  of  Diaz 
found  sympathy  in  the  hearts  of  the  Mexican  masses.  Leaders 
had  no  difficulty  in  drawing  to  their  standards  the  peons  who 
were  landless,  propertyless  and  neglected  by  the  Government. 
The  ten  years  of  revolution  really  represented  one  continuous 
struggle,  the  upheaval  of  the  peasantry  and  the  masses  against 
the  ruling  classes.  The  purpose  of  the  revoltition  has  been 
accomplished.  The  Obregon  Government  purports  to  be  a 
government  not  for  the  privileged  few  but  one  of  and  for  the 
peons.  The  landed  estates  of  the  old  regimes  are  being 
divided  with  astonishing  rapidity,  popular  education  is  being 
expanded  and  the  peons  are  coming  into  their  own.  The 
people  are  revolution  weary  and  are  in  general  satisfied  that 
their  present  government  is  not  an  exploiting  government 
but  one  which  has  the  interest  of  the  masses  at  heart. 

The  writer  is  personally  acquainted  with  the  men  who 
constitute  the  Mexican  Executive  group  and  believes  that 
their  sincerity,  honesty  and  good  faith  is  beyond  question, 
that  the  promises  of  the  Obregon  Administration  are  not  idle. 


148 

However,  despite  the  good  intentions  and  the  integrity 
of  the  Mexican  Government,  Mexico  is  finding  and  will  find 
the  problems  of  readjustment  exceedingly  difficult  to  solve. 
She  will  need  the  co-operation  of  her  sister  nations  to  satis- 
factorily solve  these  problems  and  an  antagonistic  attitude 
on  the  part  of  the  United  States  and  the  other  great  powers 
will  make  readjustment  well-nigh  impossible  and  will  precipi- 
tate whatever  revolution  Mexico  is  still  capable  of  supporting. 
On  the  other  hand,  if  these  nations  assume  toward  Mexico 
an  attitude  of  friendly  assistance,  the  day  will  be  hastened 
when  Mexico  can  emerge  from  her  trying  condition  and  can 
take  that  place  among  the  nations  which  her  wonderful 
resources  warrant.  Mexico's  immediate  problem  is  purely 
an  economic  one  and  not,  as  is  so  commonly  believed,  a 
political  one. 

One  of  the  lessons  of  the  Great  War  is  that  the  strong 
nations  cannot  isolate  themselves  and  observe  with  indififer- 
ence  and  disinterest  an  unsettled  condition  in  some  foreign 
part  of  the  world.  Modern  means  of  communication  are 
drawing  the  nations  of  the  earth  closer  together  and  at  the 
present  time  no  nation  can  afiford  to  hold  itself  aloof  from 
world  afi^airs.  It  is  not  only  to  the  self-interest  of  every  state 
to  do  its  utmost  to  induce  and  maintain  a  condition  of  sta- 
bility all  over  the  world,  but  it  has  become  a  duty  of  the 
enlightened  nations  to  lend  a  helping  hand  to  a  sister  nation 
in  difficulty. 

It  is  submitted  that  if  the  United  States  and  the  other 
nations  will  adopt  a  course  of  friendly  co-operation  toward 
Mexico  at  this  time,  Mexico  will  quickly  respond,  perform 
her  just  obligations  with  the  maximum  despatch  and  enter 
into  a  new  phase  of  national  prosperity  in  which  the  world 
will  profit. 

Since  the  above  was  written,  namely  on  May  27th,  192 1, 
President  Obregon  issued  a  statement  to  the  United  Press  relative 
to  recognition  of  the  Mexican  Government  by  the  United  States. 

This  statement  confirms  the  expressed  opinion  of  the  writer 
that  Mexico  acknowledges  and  intends  to  perform  all  of  the 
obligations  imposed  upon  her  l\v  International  Law. 


149 

The  statement  follows : 

"Replying  to  your  telegram  of  yesterday  relative  to  a 
story  published  by  the  press  to  the  effect  that  the  Government 
of  your  country  may  demand  signature  of  a  protocol  pre- 
liminary to  granting  recognition  to  the  Mexican  Government, 
it  is  my  opinion  that  a  trcaily  should  not  exist  previous  to 
recognition,  since  the  rights  and  obligations  of  Mexico,  like 
those  of  ail  other  countries,  are  established  unth  all  regard 
for  international  /aw,  and  that  there  is  no  necessity  for  a 
treaty  in  order  that  Mexico  should  recognize  those  obliga- 
tions, establishing  them  anew. 

"Mexico  believes  that  she  has  the  right  to  be  considered 
as  any  other  of  the  nations  which  are  subject  to  the  rules  of 
international  law.  The  United  States  of  America,  like  any 
other  country,  may  ask  for  its  nationals  all  the  guarantees) 
and  prerogatiz'es  that  international  law  confers,  without  the 
necessity  that  they  should  be  ratified  in  a  protocol,  and 
Mexico  neither  evades  nor  will  evade  in  amy  way  whatsoez'er 
any  of  the  obligations  which  are  hers  as  an  independent 
nation. 

"Moreover,  Mexico  does  not  demand  renewal  of  friendly 
relations  with  those  nations  which  still  doubt  the  stability 
of  her  Government  and  her  firm  resolve  to  comply  with  all 
her  obligations ;  and  those  countries  may  take  all  the  time 
that  their  foresight  and  interests  warrant  for  the  renewal  of 
relations  when  they  may  believe  it  convenient. 

"I  am  certain  that  the  high  personalities  who  now  admin- 
ister your  country,  interpreting  the  noble  desires  for  harmony 
which  are  being  strengthened  with  the  passing  of  each  day. 
will  avoid  renewal  of  relations  between  both  nations  on  a 
basis  which  in  any  way  affects  the  rights  and  sovereignty 
of  the  Mexican  people.  This  is  the  only  condition  under 
which  the  Government  of  this  Republic  desires  renewal  of 
relations  with  those  countries  where  they  are  at  pre-ent  in- 
terrupted." 

This  book  has  been  an  effort,  as  far  as  claims  of  foreigners 
against  Mexico  are  concerned,  to  define  "the  rights  and  obliga- 
tions of  Mexico"  as  "established  with  all  regard  for  International 
Law." 


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